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THE WAY FOR BETTER COMMUNICATION BETTER LIFE

Jasmine Telecom Systems PCL.

ANNUAL REPORT 2012


Computer System Integration Cloud Computing

Telecom Systems Integration

Telecom Service Business

THE WAY FOR BETTER COMMUNICATION

BETTER LIFE


Contents 004 Financial Summary 005 General Information 006 Message from the Board of Directors 008 Business of the Company and Subsidiary

Revenue Structure of the Company 011 and Subsidiary 012 Major Event in Year 2012 013 Risk Factors

JASMINE TELECOM SYSTEMS PCL.

014 Industry Overview 017 Shareholding Structure 018 Management 026 Board of Directors 034 Corporate Governance 040 Related Party Transactions 042 Financial Status and Operating Results 050 Report of Audit Committee

Report of the Board of Directors with 052 Responsibility for the Financial Statement 058 Report of Independent Auditor 060 Financial Statements otes to Consolidated 069 N Financial Statement


WiFi

4G

3G

Jasmine Telecom Systems Public Company Limited

MSA

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Security

AN Cloud Computing

Digital TV

JTS CONNECTING THE WORLD

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Annual Report 2012


Financial Summary Operating Results (‘ 000 Baht) 2010 Sales and Services Income Total Revenue Cost of Sales and Services and Selling, Servicing and Administrative Gross Profit* Operating Profit Net Profit (Loss) Total Assets Total Liabilities Shareholders’ Equity

2011

2012

3,456.08 3,584.82 3,505.10

1,319.69 1,423.05 1,353.86

1,179.13 1,225.74 1,319.07

373.39 141.66 (100.86) 5,911.22 4,304.14 1,607.08

256.96 64.55 (67.52) 4,290.79 2,821.93 1,468.86

255.81 66.72 (178.36) 2,699.09 1,448.18 1,250.91

2010 1.31 2.68 -1.65% -6.00%

2011 1.58 1.92 -1.32% -4.39%

2012 2.10 1.16 -5.10% -13.12%

2010 -0.14 702,950,000

2011 -0.10 705,448,972

2012 -0.25 706,457,300

2.29 1.00 702,950,000

2.08 1.00 706,457,300

1.77 1.00 706,457,300

Financial Ratio Current Ratio (times) Debt to Equity (times) Return on Assets (%) Return on Equity (%)

Per Share Data (Baht) Earnings (Loss) per Share Weighted Average Number of Ordinary Shares (shares) Book Value Par Value Paid-up Ordinary Shares (shares)

* Gross profit was a result of sale and service incomes minus sale and service costs.

Jasmine Telecom Systems Public Company Limited

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General Information Detailed of Company Company Name : Jasmine Telecom Systems PCL. Registration : 0107547000109 Head Office Address : 200 Moo 4, 9th Fl. Jasmine International Tower, Chaengwattana Road, Tambon Pakkret, Amphoe Pakkret, Nonthaburi, 11120 Detailed of Subsidiary Tel. (66)-02100-8300 Fax. (66)-02502-3363 Home Page : http://www.jts.co.th Company Name : Cloud Computing Solutions Co., Ltd. Nature of Business : Information & Registration : 010552701289 Communication Technology Head Office Address : 200 Moo 4, Chaengwattana Road, Tambon Pakkret, Amphoe Pakkret, Nonthaburi, 11120 Tel. (66)-021003500 Fax. (66)-025023511

Total Amount and Type of Issued Share

Registered Ordinary Share : 706,457,300 Shares Paid-up Ordinary Share : 706,457,300 Shares Par Value : 1 Baht Total : 706,457,300 Baht

The Company Structure at December 28th 2012 Jasmine International Group (A listed company in SET)

Minor Shareholders

50.91%

49.09%

Jasmine Telecom Systems PCL.

97.87% Cloud Computing Solutions Co., Ltd.

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Annual Report 2012


Message from the Board of Directors

Dear Shareholders

In light of changes in information technology, the continuing development in communications and the ever increasing popularity of social networks, the Company has expanded its business to be consistent with such changes, competition and opportunities, while maintaining its main business as a system integrator and bidding for new projects. For example, by the end of 2012, the licensees of the 2.1GHz frequency spectrum have to build high speed wireless Internet networks with 3G technologies. Having anticipating this, the Company has taken part as a subcontractor to implement the network for the licensees. In expanding into service-providing business, the Company and its subsidiary have developed applications based cloud computing technology and are now offering this service to several clients. Cloud computing technology enables several services such as software, hardware and infrastructure to be rented and delivered via the Internet, thus eliminating the needs to invest large capital from a user’s stand-point. Moreover, the Company is preparing to take part as an MVNO (Mobile Virtual Network Operator) whereby the Company is a mobile service provider but does not have its own network. Many applications and contents will be developed to provide value added services to its clients and to ensure the Company’s competitive edge. Entering a service-providing business will lead to several new businesses and opportunities for the Company, which seeks to provide the most satisfying service to its clients. In the rapidly changing technology and industry, the Company intends to take advantage of new development in order to serve and benefit all parties involved.

(Mr. Pleumjai Sinarkorn) (Mr. Kriengsak Chalermtiragool) Director Director Jasmine Telecom Systems Public Company Limited

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Annual Report 2012


BUSINESS OF THE COMPANY AND SUBSIDIARY The Company and its subsidiary provide turnkey telecommunications, IT systems integration and other related services. Besides, the Company is the authorized distributor of test and measurement equipment used in telecommunications industry and also provides another telecom services. In addition, the Company expands its business to the rented contact center system on Hosted Contact Center, in the name “EasyConnect”, turnkey solution business services for computer system, cloud computing business. The company also expand its business to be a service provider for MVNO (Mobile Virtual Network Operator). Followings are the details of each business of the Company. 1. Telecom Systems Integration Telecom systems integration involves the distribution of telecommunications equipment and the provision of other related services, such as the design, supply, selection, installation, test and training of telecom equipment for governmental and private sectors, for example TOT, CAT Telecom, Provincial Electircity Authority, Metropolitan Electricity Authority, The National Broadcasting and Telecommunications Commission, State Railway of Thailand, Government Savings Bank, and Triple T Broadband. Telecom systems integration is operated as a project with a purchase and installation agreement. The major distribution channels for the Company’ System Integration business categorized into 2 channels. The first is bidding for projects of the government and private sector, and the second is being subcontracted from other winning bidders.

The Company engages in telecom system services, as follows :

1.

Access Network - the Company supplies and installs access network equipment which connected a

central office to the premises of the customer. There are several solutions, such as Digital Data Network (DDN) or Private Network offering leased line Internet connectivity, and Broadband Connections over Digital Subscriber Lines (xDSL) utilizing the copper wired and Fiber to the X (FTTx) offering hi-speed Inter net service.

In addition, the Company provides terminal equipment for hi-speed Internet or network connections, such as Router Modems, Media Converter, and FTTx Termination Unit (ONU) for hi-speed Internet network, and also other required network equipment.

2.

Transmission Network - the Company supplies and installs transmission network equipment which

connects between the exchanges of the telecom proviers. The networks link exchanges in the sameprovince, among provinces or regions and transmit the data to the destination exchange based on the selected solution platform, such as Next Generation Dense Wavelength Division Multiplexing (NG-DWDM) or Synchronous Digital Hierarchy Multiplexer (SDH MUX) or IP Link devices.

3. Data Communication Network - the Company supplies and installs data communication network equipment which supports the transmission of data or connects equipment to link various networks using the IP protocoland/or ATM. The Company offers various solutions, such as IP Core Router for IP Network and Core Router for International Gateway Exchange (IGX) and Switch for Metro Ehternet network.

Jasmine Telecom Systems Public Company Limited

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4.

Next Generation Network - the Company offers new generation solutions to fixed-line telephone

operators who have already installed and launched networks. The Company develops, improves or adds some service features, such as voice, data and video in order to enhance the operating efficiency of thes operators. Examples of these are intelligent network equipment (IN) and Next Generation Network equipment (NGN).

5.

Wireless Communication Network - the communication channel transmitting via electromagnetic

wave, which are divided into frequency bands or channels and assigned for various communication services, including Radio Frequency band (RF), Microwave band, Infrared band and etc. The Company plans to propose the wireless communcation network solutions for telecom operators and other customers,to meet their requirements, such as WiFi/ WiMAX Network, Mobile Telephone Network 3G and LTE.

In addition, the Company operates the turnkey projects include system design, procuring, installation for security systems, such as CCTV System, Access Control System, Prevention of Intrusion System and Fire Alarm System. Moreover, the Company is the authorize distributor of Test and Measurement Equipment, mainly for use in telecommunications industry, such as mobile communication measuring instruments, fibre optic measuring instruments, digital communication measuring instruments, and so on.

2. Telecom Service Business The Company provides various telecom services including implementation, system design and installation, testing, as subcontractor or turnkey project. The Company has expertise and integrity to provide the services for corporate customers in their non-core business, or their projects that require expert system integrator, and including other services, such as system/equipment maintenance services. In 2012, the Company has provided telecom service with respect to the Universal Service Obligation (or USO) projects of the National Broadcasting and Telecommunications Commission (NBTC) to some opertors. In addition, the Company has been expanding its business into MVNO (Mobile Virtual Network Operator) business and opened a business for rented contact center system on Hosted Contact Center, in the service name as “EasyConnect”. 3. Computer Systems Integration and Cloud Computing Business Computer Systems Integration Business is operated by Cloud Computing Solutions Company Limited “CCS”, (the Company’ subsidiary). The business involves turnkey project for computer and related equipment, including the consulting services, system design and installation. The service range also entail the development of software applications and a maintenance service for computer hardware and other peripheral equipment to customers include state enterprises, government and private sectors.

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CCS specialises in the telecom industry and infrastructure. It engages in three types of systems, as follows :

1. Customer Care and Billing Systems involve all customer service and Billing systems, which consist of several sub-systems, e.g. telephone service activation, Customer Service System, Order System, billing and payment systems. 2. Data Intelligence Systems include data warehouse systems which accompany business intelligence systems, such as the development of applications for data storage of client information of commercial banks. The data is analysed for the purpose of developing marketing plans or plans to launch new products.

3. Enterprise Resource Planning Systems is a back office system which supports the internal operations of an

In addition, CCS has included the business of Cloud Computing Services, which are the service integration of computer hardware, software and high quality Internet, to provide leased services with customization for various customers. The cloud computing services can be divided into 2 types;

Cloud Infrastructure Service (Infrastructure-as-a-Service)

organisation, such as an accounting system, inventory management system, and so on.

The Cloud infrastructure services are the leased service for hardware resources, such as CPU, memory, storage. CCS currently provides this type of service for Jasmine Group and also external customers.

Software Based Services (Software-as-a-service)

Sofware based services are the leased service for application software. In 2013, CCS will provide the enterprise management software for target customers in government organizations. Then CCS plan to launch other types of software applications and services.

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REVENUE STRUCTURE OF THE COMPANY AND SUBSIDIARY Revenue structure of the Company and subsidiary was as follow :

Consolidated Statement of Revenue Business Operated 2010 2011 2012 by Million Baht % Million Baht % Million Baht %

Telecom Systems Integration Business Company Telecom Service Business Company Computer Systems Integration Business Subsidiary Total Sales and Services Other Income Company Total Revenue

3,313.24 92.43 7.17 0.20 135.68 3.78 3,456.08 96.41 128.73 3.59 3,584.82 100.00

1,189.88 83.62 1,104.41 90.10 60.10 4.22 11.70 0.96 69.71 4.90 63.02 5.14 1,319.69 92.74 1,179.13 96.20 103.35 7.26 46.61 3.80 1,423.05 100.00 1,225.74 100.00

Revenue Structure Year 2012 Other Income Telecom Service Business Computer Systems Integration Business

3.80% 0.96% 5.14% 90.10 %

Telecom Systems Integration Business

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Annual Report 2012


Major Events in Year 2012 The Company has on-going projects with both existing and new customers, such as, a turn-key contract of Universl Servcie Obligation Project (USO) Implement Payphone in Villages and Implement Payphone and Internet in Schools for CAT Telecom Public Company Limited. The project include survey, design, procure, installation and test the total 1,558 payphone sites and computer system with Internet service total 252 schools and also the turn-key contract with State Railway of Thailand for automatic level crossings. The Company also got contracts from Government Saving Bank (GSB) for purchaseing and installation of the closed circuit television system (CCTV), maintenance services and Fire Alarm System. For test and measurement equipment, the Company got more customers in private section such as Total Access Communication PCL, Bangkok Telecom Engineering Co., Ltd., and Advanced Info Service PCL. For Telecom Service Business, the Company has provided the supplies, installation and services including coin collection and maintenance services for payphone and affiliate parts, continuing from last year, to Triple T Broadband PLC and Jas Tel Network Co., Ltd. with respect to the Universal Service Obligation or USO ruled by NBTC. Moreover, the Company has launched a new business in providing Hosted Contact Cente - a contract center system provided to user via broadband Internet networks - having the service’s name as “EasyConnect”. The Company has developed and customized this service itself from its experienced human resources. The target customers are Small and Medium Enterprises (SMEs) or any organization requiring a customer-service call center to promote sales, to support sale, to provide after-sales service or another but do not want to invest in high cost for the required system or prefer not to have burdens of administration and maintenance which are also difficult and high expenses. Only a computer set and a phone number accessing with broadband internet network, then the customer could apply to use contact center with “EasyConnect”. The Company has been expanding its new business in MVNO (Mobile Virtual Network Operator). The Company acquired a license type 1 for resale of telecommunications services as a mobile virtual for Non Facilities Based MVNO from the National Broadcasting and Telecommunications Commission (NBTC) to operate MVNO business on June 16, 2011. Then on July 6, 2012, the Company proposed MVNO Business Plan offering to TOT Public Company Limited to be the reseller of 3G Mobile subscribing numbers for TOT. The proposal offering is on the evaluation period. The subsidiary of the Company has provided services of cloud computing business in which the various software applications are stored on the main sever to be ready for an authorized user to log-in to use the agreed applications via broadband internet network from anywhere at any time. The cloud computing is an alternative technologies for business owner who wants to use information technology systems whether they prefers to use this kind of software applications service instead of investing in the system themselves. So, it is suitable for small and medium businesses having limitation of budgets. There are two kinds of services of the cloud computing - Cloud Infrastructure Service (Infrastructure-as-a-Service) and Software Based Services (Software-as-a-Service).

Jasmine Telecom Systems Public Company Limited

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Risk Factors

Risk Relating to Reliance on Major Customers

Risk Relating to Reliance on Major Suppliers

Risk Relating to the Delivery of Projects

Risk Relating to the Change of Technology

Risk relating to the exchange rate

The Company’s revenue are principally generated from sales and services mostly in form of projects from our main clients who engage in telecom business, namely, TOT Public Company Limited (TOT), CAT Telecom Public Company Limited (CAT), Provincial Electricity Authority (PEA.) In case the mentioned clients slow their investment down or reduce their budget or do not have new projects, the Company’s revenue would be directly affected. However, we have been seeking for another client in different field. Major supplier is Huawei, which is well known in telecom area. In case, the Company cannot have equipment from these suppliers or these supplier engage in bidding themselves, the Company’s operations would be affected. However, the Company believes there are still other suppliers with a similar quality. In order to mitigate the risk of a heavy reliance on any single supplier, the Company has established a good relationship with many leading worldclass suppliers. The normal duration for project implementations are three months to two years, or an average of eight months, depending on the project size. In the event the Company is unable to complete and deliver its work in agreed time, the Company’s credibility would be affected and/or would have to pay a penalty. Hence, the margin for the project might decline. Due to the rapid change in communications andtelecommunications technologies, the Company must therefore closely monitor technological advancements and related information, as well as the development of equipment manufacturers so that it can provide needed services to customers in due time. The Company imports equipment for its operations but does not store it as inventory. For the telecom systems integration and test equipment units, the Company purchases equipmentonly when a project is awarded or an order is received. The following policies shall be used to hedge against foreign exchange exposure that may arise from the purchase of imported equipment: 1) in a case in which a contract made with a customer is denominated in Baht, a forward contract shall be purchased from financial institutions to mitigate the risk; and 2) in a case in which a contract made with a customer is denominated in foreign currency, the Company shall apply a back-toback policy by using the same exchange rate used with its suppliers and customers in order to offset its position.

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Annual Report 2012


Industry Overview 1. Telecom Regulation In 2012, The National Broadcasting and Telecommunications Commission (NBTC) issued national policy, rules and regulations including 3 important master plans which are : The Frequency Management Master Plan and National Table of Frequency Plan, The Fist Broadcasting Master Plan No.1 (2012 - 2016) and Telecommunications Master Plan No.1 (2012 - 2016). Furthermore, there are associations of the Committees and Sub-Committees to carry out specific issues, including The Committee of Reserch and Development Fund of Broadcasting and Telecommunications as the Universal Service Obligation (USO) The NBTC important issuances of master plans and policies that would affect the telecommunications industry are as the followings. Telecommunications resource allocation policy. In 2012 the NBTC organized the 2.1 GHz spectrum auction and license issuances of 45 MHz bandwidth provided to the 3 bidders. This auction leads to the establishment of telecommunications network supporting the mobile phone communication services, including voice and data and covering across the area of Thailand. Broadcasting channels allocation policy including radio and television channels, and also the transmission policy from analog television to digital television. The new entrans encouraging policy, to develp and promote free and fiar competition among telecom mobile operators both incumbents and new entrants. The NBTC regulate that the licensees of 3G spectrum shall guarantee to provide at least 10 percent of their 3G network capacity to supply for the operators of Mobile Virtual Network Operation (MVNO) services. The policy to provide universal basic telecommunications services and social services or Universal Service Obligation (USO), and also the budget approved for the wireless Internet network implemenation, as the public Wi-Fi throughout the are of Thailand. 2. Industry Situation and Competition in 2012 and Trend 2013 According to Thailand Telecommunications Market Report year 2012 by the National Broadcasting and Telecommunications Commission (NBTC) disclosed the telecommunications market survey in 2013 total valued 2.7 hundred trillion baht. It represent the telecommunications market value compared to Gross Domestic Product (GDP) at Current Market Price equals to 2.39 percent, or equals to 5.56 percent of GDP at constant prices (Real GDP). The growth of market value compared to year 2011 equals to 9.7 percent. The major telecommunications market sector is the mobile communication market with 76 percent of total telecommunications market value. The report predicted that, in 2013 the growth rate of telecommunications market value would be 13 percent per year, and predicted the telecommunications market value in 2016 would be 5.4 hundred trillion baht, or the growth rate on that year would be 24 percent compare to the year before, and the cumulative average growth rate (CAGR) would be 17 percent per year.

Jasmine Telecom Systems Public Company Limited

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600,00.00

24.44%

500,00.00 20.42%

400,00.00

17.69% 9.69%

300,00.00

13.37%

200,00.00 100,00.00 -

2011

2012

2013

Million Baht

2014

2015

2016

Growth Rate

Economic estination information from office of the National Economic and Social Development Board as at November 19, 2012 and estimation of GDP growth ratio at 5.5% of 2012 fixed price. 3. Technology Trend in 2013 Year 2013, there would be the major shift in the Information and Communications Technology market (ICT), particularly the influences of consumer spending that would be the driven factor of the ICT expenditures in Thailand, including the IT service trends movement, the applications of smart devices that widely used in business sectors, together with the full range of 3G services provided by each mobile operators. These factors would affect the trend and form of ICT technology applications and utilizations. Important technology trends that would encourage the ICT market in 2013 are

LTE Technology (Long Term Evolution) or 4G : After the license auction of 3G spec trum, the new

interesting technology that would be the next key trend in Thailand is 4G technology. The 4G provide speed of services 7 times faster than 3G services. The 4G technology would utilize the frequency band 2300 MHz, which currently occupied by TOT, and the frequency band 1800 MHz which consession period would be expired in September 2013, and currently occupied by DPC company, the subsidiary company of AIS. NBTC expected that they would carry the 1800 MHx frequency band to process the liencse auction in 2014. Mobile Device Battles : The mobile device market trends, especially smart phones and tablets section, would bring out high growth rate, even higher growth rate than PCs and notebooks, and would be the major factor that encourage the increasing of data usage in broadband services, both wire and wireless broadband. Gartner, the technology researcher, predicts that year 2013 mobile phones will be the major devices over PCs due to the popularity of Internet access. Gartner also predicts that year 2015, 80 percent of mobile phones would be smart phones, which would be Windows Phone for 20 percent. And

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also predicts that year 2015 the mobile device market would grow up to 50 percent of laptops. The major devices would applied Android operation system, followed by Apple iOS and the Windows 8 would be ranked the third. Business organizations would provide and support the personnel usage of both PCs and Windows 8 applications that would be appropriated for enterprise applications, rather than for general use. From Consumerization to Personal Ecosystem : The trend of provision the personal own smart phones to use for working within organization would be the driven factor for many organization to design their internal IT network policies to encourage the BYOD (Bring-Your-Own-Device) concepts. This concept would encourage the performance of the employees to utilize their own smart phones for works, while they can also manage personal tasks together in the workplace. Personal Cloud - Personal Cloud would replace the PC usges. The users can utilize the Personal Cloud to store and backup their personal information, access to various services, and store their personal preference data for digital usages. Users can access their Personal Cloud in anytime, in anywhere, and by any device. Each user’s Personal Cloud would be based on various platforms. The important features of Personal Cloud are the cloud storage feature and the synchronization with any device. Enterprise App Stores : Gartner states that in 2014 most organizations would allow the employees access and download Mobile Application via the private application stores. These trends would change the role of IT management in the organizations, from the central management concept to be the marketing manager. Furthermore, there would be the trend of conglomerate between Cloud and Mobile solution in the near future. The Internet of Things (IoT) : The Internet of Things is referred to the Internet expansion to interconnect with other devices, such as embedded sensors and near field communicaion (NFC) payments. The concept of “Mobile� would be broaden other than just the mobile phone. These Intelligent Devices will be connected together utilizing various technologies, such as near field communication (NFC), Bluetooth Low Engergy (LE) and Wi-Fi.The examples of these devices are the wristwatch displays, healthcare sensors, smart posters, and home entertainment systems. These trends would lead to new business models, such as the Digital Supply Chain or Smart City which the variety of devices can be applied and access various services. Hybrid IT and Cloud Computing : Cloud Computing is the technology that gain more popularity and recognition in last year. In 2013, the Cloud Computing concept would acquire and integrate with IT (Hybrid IT). Organizations should develop their Private Cloud and create their own platform to manage Cloud and also manage Services both within and outside the organization. The IT department would provide services as the broker of those services.

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SHAREHOLDING STRUCTURE List of top 10 major shareholders and shareholding structure as at December 28, 2012

Name of Shareholders

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Jasmine International Public Company Limited ACeS Regional Service Co., Ltd. T.J.P. Engineering Co., Ltd. Mr. Kiet Srichomkwan Mr. Wichai Boonsatirapong Mrs. Siriporn Sirisuwat Mrs. Sunee Wongchotpinthong Female Sergeant Pissamai Wongsubprasert Thai NVDR Co., Ltd Mr. Prin Chirathivat

Number of Share

% of Total Shares

231,714,400 64,027,700 63,918,000 18,000,000 12,100,000 8,890,000 6,330,200 5,800,000 5,492,100 5,399,300

32.80 9.06 9.05 2.55 1.71 1.27 0.89 0.82 0.77 0.76

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Annual Report 2012


Management Structure

Remuneration Committee

Board of Directors

Audit Committee Internal Audit

Executive Committee

President Corporate Human Resource Section

Office of President Deputy Managing Director

Telecom Service Business Unit

Project Sales Business Unit

Accounting and Finance Department

Key Account Management Department

Project Management Department

Technical Support Department

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Administration Department

Information Technology Section

Business Development Section


Management The Company has the Board of Directors and three committees i.e. Audit Committee, Executive Committee and the Remuneration Committee.

The Board of Directors

1. Mr. Pleumjai Sinarkorn 2. Mr. Kriengsak Chalermtiragool 3. Mrs.Nonglug Pongsrihadulchai 4. Mrs.Nitt Visesphan 5. Mr. Arporn Kengpol 6. Mr. Annop Suthakavatin 7. Mr. Monton Sudprasert

Corporate Secretary

Mrs. Nonglug Pongsrihadulchai

Director Director and President Director Director Independent Director Independent Director Independent Director Corporate Secretary

Authorized Directors and Conditions

Mr. Pleumjai Sinarkorn, Mr. Kriengsak Chalermtiragool, Mrs. Nonglug Pongsrihadulchai and Mrs. Nitt Visesphan two of them affix their signatures together with the Company seal.

Scopes of Authority and Duties of the Board of Directors

The Directors shall honestly and prudently perform their duties in accordance with the laws of Thailand, the objectives and the Articles of Association of the Company as well as the legal resolutions or the recommendations of the shareholders’ meetings. The scopes of authority and duties of the Board of Directors are summarized as per the followings. 1. Convene an annual general shareholders’ meeting within four months of the last day of the fiscal year of the Company 2. Convene a meeting of the Board of Directors at least once every three months 3. Provide the preparation of the audited balance sheet and the profit and loss statement of the fiscal year of the Company for submission to the shareholders’ meeting for consideration and approval 4. May delegate their authority to any director or directors or other person to take any action on behalf of and under the supervision of the Board, or empower such person as the Board considers appropriate and within the time the Board considers appropriate. The Board may cancel, withdraw, change or amend the said authority whenever it deems appropriate. The Board of Directors may grant the Executive Committee the authority to supervise the normal operations of the Company, which was already described in the duties and authorities of the Executive Committee. However, such authorization shall not include transactions in which any director or member of management has a material interest, directly or indirectly, or has a conflict of interest with the Company or its subsidiary, except where the transactions are in accordance with policies and measures which were already approved by the Board or where guidelines have already been established.

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5. Determine the Company’s objective, policy, business plan and budget, as well as supervise and monitor the management of the Executive Directors to ensure that they conform to the Company’s policy, with the exception of the following matters which require the approval of a shareholders’ meeting: a capital increase, capital reduction, debenture issuance, the entire disposal or transfer of the business or a significant part thereof to other parties, the purchase or transfer of other businesses, and an amendment of the Memorandum of Association or Articles of Association. Furthermore, the Board of Directors shall supervise and monitor the Company to ensure it complies with the regulations of the SEC and SET, i.e. connected transactions, the disposal or acquisition of assets, or other related legislation, etc. 6. Determine the management structure, appointment of the Executive Committee, the President and other committees as appropriate 7. Monitor the Company’s performance so as to compare with the overall business plan and budget 8. No director shall engage in any business which has the same nature as and is in competition with the business of the Company or become a partner in an ordinary partnership or become a director of a private Company or any other Company operating a business which has the same nature as and is in competition with the business of the Company, either for his or her own benefit or for the benefit of other persons, unless he or she notifies the shareholders’ meeting prior to the resolution of his or her appointment. 9. A director shall notify the Company without delay when he has a direct or indirect interest in any contract which is made by the Company, or when he or she holds shares or debentures of the Company or an affiliated company, and shall indicate any increase or decrease in the number of the director’s total number of shares.

Authorized Financial Operating Duties of the Chairman of the Board of Directors

The Chairman of the Board of Directors shall approve expenditures, purchases, procurements, rentals and leasing related to the Company’s normal business operations and investments within a credit limit of Baht 30 million or equivalent or an amount the Company’s Board of Directors assigned for each transaction. Also, the Chairman of the Executive Committee shall approve bidding for projects and/or a consortium with a partner within a project value limit of Baht 200 million or an equivalent amount for each project. The authority of the Chairman of the Board of Directors shall not include empowering and/or delegating authority for the approval of transactions which may cause a conflict of interest with the Company according to the SET’s regulations. The approval of said transactions is required to be proposed to the Board of Directors and/or Shareholders of the Company for their consideration and approval in accordance with the Company’s Articles of Association or relevant laws, except for the approval of transactions in the normal course of business which is already covered by existing guidelines approved by the Board. Besides, the Board of Directors has granted the Executive Committee, the Chairman of the Executive Committee and the President their authorities to supervise the normal operations and investments of the Company. The scopes of authority and credit limit of each of these three levels of management are clearly determined. No authority is granted without a credit limit determined. Jasmine Telecom Systems Public Company Limited

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Audit Committee 1. Mr. Arporn Kengpol 2. Mr. Annop Suthakavatin 3. Mr. Monton Sudprasert

Chairman of the Audit Committee Audit Committee Audit Committee

Scopes of Authority and Duties of the Audit Committee The scopes of authority and duties of the Audit Committee were approved and authorized by the Board of Director as the followings. 1. To verify the Company’s financial statements for accuracy and adequacy 2. To oversee both the Company’s internal control system and internal audit system to ensure their appropriateness and efficiency aside from considering independence of the internal audit department, approving the appointment, the transfer, and the dismissal of the head of the internal audit department as well as the heads of any other departments responsible for internal auditing 3. To oversee and ensure the Company’s conformity to the law regarding securities and stock exchange in addition to the regulations of the Stock Exchange of Thailand and the laws relevant to the Company’s business 4. To consider, select and appoint persons who are independent to be the Company’s external auditors and propose their remuneration in addition to having a meeting with such auditors at least once a year without the presence of the management 5. To consider the related transactions as well as the transactions which may cause conflicts of interest and make sure that such transactions are reasonable and in compliant with the related law and the regulations of the Stock Exchange of Thailand for the maximum benefit of the Company 6. To prepare the Audit Committee report which is disclosed in the Annual Report of the Company ; the report must be certified by the signature of the Chairman of the Audit Committee and must include at least the following information : 6.1 The opinion on accuracy, completion, and creditability of the Company’s financial report 6.2 The opinion on adequacy of the Company’s internal control system 6.3 The opinion on compliance with the law regarding securities and stock exchange in addition to the regulations of the Stock Exchange of Thailand and the laws relevant to the Company’s business 6.4 The opinion on appropriateness of the external auditors 6.5 The opinion on the transactions which may have conflicts of interest 6.6 The number of Audit committee meetings and the attendance of each Audit Committee member 6.7 The opinion or overall remarks the Audit Committee obtains during performing duties in line with the charter 6.8 Other information deemed appropriate for the acknowledgement of the shareholders and investors under the scope of duties and responsibilities authorized by the Board of Directors 7. To oversee the Company’s risk management to ensure their appropriateness and efficiency 8. Any other tasks assigned by the Board of Directors with the consent of the Audit Committee

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The Audit Committee has a 3-year term in the office. In case of vacancy for any reason other than at the expiry of his term, the Board of Directors shall, to fulfill the Audit Committee as stipulated, elect and appoint a qualified person to fill in the vacancy. Such new member of the Audit committee shall retain his office only for the remaining term of the office of the Audit Committee member whom he replaces. Executive Committee Scopes of Authority and Duties of the Executive Committee The scopes of authority and duties of the Executive Committee were approved and authorized by the Board of Director as the followings. 1. Determine the Company’s business policies and strategy, and propose this to the Board of Directors for its consideration and approval 2. Determine the Company’s business plan, delegate management authority and prepare an annual expenditure budget and annual business investment budget, and propose these to the Board of Directors of the Company for its consideration and approval 3. Determine the organisation structure and management system, which shall be suitable for the current business environment to ensure that the Company’s business operations are efficient 4. Determine the salary and wage structure, and prepare regulations in regard to remuneration on a cash and non-cash basis and a regulation concerning increases in salary and bonuses which are suitable for the Company’s situation each year 5. Evaluate, appoint, remove and relieve Company’s employees who have a position lower than President down to Assistant Vice President 6. Audit the Company’s operating results to ensure they comply with the business plan approved by the Company’s Board of Directors 7. Approve expenditures, purchasing, procurements, rent and leasing related to the Company’s normal business operations and investments within a credit limit of Baht 200 million or an equivalent amount the Company’s Board of Directors assigned for each transaction 8. Approve loans and credit lines for the Company’s normal business operations within a credit limit of Baht 200 million or an equivalent or any amount that the Company’s Board of Directors assigned for each transaction. 9. Approve the opening of bank accounts for all types of accounts and determine the Company’s signing conditions for bank account payments 10. Perform other duties which are assigned by the Company’s Board of Directors in each time period 11. Approve expenditures, purchasing, procurements, rent and leasing related to the Company’s business operations and investments which are not normal within a credit limit of Baht 50 million or an equivalent amount for each transaction. In case the credit limit is exceeded, the Executive Committee is required to propose this to the Board of Directors of the Company for its consideration. 12. Approve the bidding for projects and/or a consortium with a partner within a project value limit of Baht 500 million or an equivalent amount for each project. In case the credit limit is exceeded, the Executive Committee is required to propose this to the Board of Directors of the Company for its consideration. Jasmine Telecom Systems Public Company Limited

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Authorized Financial Operating Duties of the Chairman of the Executive Committee

The Chairman of the Executive Committee shall approve expenditures, purchases, procurements, rentals and leasing related to the Company’s normal business operations and investments within a credit limit of Baht 30 million or equivalent or an amount the Company’s Board of Directors assigned for each transaction. Also, the Chairman of the Executive Committee shall approve bidding for projects and/or a consortium with a partner within a project value limit of Baht 200 million or an equivalent amount for each project. The authority of the Executive Committee and the Chairman of the Executive Committee shall not include empowering and/or delegating authority for the approval of transactions which may cause a conflict of interest with the Company according to the SET’s regulations. The approval of said transactions is required to be proposed to the Board of Directors and/or Shareholders of the Company for their consideration and approval in accordance with the Company’s Articles of Association or relevant laws, except for the approval of transactions in the normal course of business which is already covered by existing guidelines approved by the Board. The selection of the new executive committees is under consideration. During the selection, the executive committee’s jurisdiction is exercised by the Board of Directors.

Remuneration Committee 1. Mr. Arporn Kengpol 2. Mr. Pleumjai Sinarkorn 3. Mr. Annop Suthakavatin

Chairman of the Remuneration Committee Remuneration Committee Remuneration Committee

Scopes of Authority and Duties of the Remuneration Committee The scopes of authority and duties of the Remuneration Committee were approved and authorized by the Board of Director as the followings. 1. Determine the remuneration policy for the Board of Directors, President, and any committees appointed by the Board of Directors 2. Determine the annual remuneration and other benefits for the Board of Directors and any committees appointed by the Board of Directors 3. Evaluate the performance and determine the annual remuneration and other benefits for the President 4. Consider the allocation of the Employee Securities Option Plan adhere to regulations and conditions relating to the issuance of related securities The Remuneration Committee is directly responsible to the Board of Directors. In addition, the Chairman and members of the Remuneration Committee have a term of three years. However, the Chairman and members of the Remuneration Committee may be re-appointed to their positions after the expiration of their terms.

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Annual Report 2012


The authority of the Remuneration Committee shall not include the authority to approve transactions which may cause a conflict of interest with the Company or any transaction in which members of the Remuneration Committee or their connected persons have an interest or benefit that causes a conflict of interest according to the SET’s regulations. The approval of said transactions is required to be proposed to the Board of Directors and/ or Shareholders of the Company for their consideration and approval in accordance with the Company’s Articles of Association or relevant laws, except for the approval of transactions in the normal course of business which are already covered by existing guidelines approved by the Board. Executives 1. Mr. Kriengsak Chalermtiragool 2. Mr. Anuchit Jutamatayangkul 3. Mr. Prasert Towiwat 4. Mr. Wichai Tanjariyaporn 5. Mrs. Busakorn Jongsaksawat

President Deputy Managing Director Vice President - Outsourcing Business Unit Vice President - Project Sales Business Unit Vice President - Accounting and Finance Department

Note : Mr. Prasert Towiwat retired form the Company on December 31, 2012 and the selection of a new executive to fulfill this position is under consideration.

Scopes of Authority and Duties of the President

1. To manage and control the Company’s normal business operations and act pursuant to assignments by the Board of Directors and the Board of Executive Directors as well as assign a suitable person to manage and perform as the representative of the President in necessary and suitable issues under the consideration of the President in accordance with the Company’s Articles of Association or relevant laws 2. To approve expenditures, purchasing, procurement, rent and leasing according to the annual budget which is approved by the Board of Directors, as well as expenditures, purchasing, procurement, rent and leasing related to the Company’s normal business operations and investments within a credit limit of Baht 5 million or equivalent or complies with the Company’s Board of Directors assigned for each transaction 3. To evaluate, appoint, remove and relieve the Company’s employees which have a position lower than the Assistant Vice President 4. Approve bidding for projects or consortium with a partner within a project value limit of Baht 100 million or an equivalent amount for each project

The delegation of authority to the President as well as the assigning of a suitable person to act as a representative under the consideration of the President does not include the authority to approve a transaction which may have a conflict of interest with the Company or any transactions which may have a conflict of interest according to the SET’s regulations. The approval of said transactions will be required to be proposed to a Board of Directors’ meeting and/or Shareholders’ meeting in accordance with the Company’s Articles of Association or relevant laws, except for normal business transactions already covered by existing guidelines approved by the Board. Jasmine Telecom Systems Public Company Limited

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Selection of Directors and Executives The Company has not appointed the Nominating Committee; therefore, the Board of Directors is responsible for selecting persons with proper qualifications, experiences and sufficient time to contribute their roles to the Company. The selected persons shall be proposed to the shareholders’ meeting for election which shall be supported by no less than the total shareholders present and eligible for the voting. Each shareholder shall exercise all of his votes to elect either one or several persons as a director or directors. The persons who receive the highest number of votes in their respective order of the votes in a number not exceeding the number of directors to be elected at the meeting shall be elected as the director(s). At an annual ordinary shareholders’ meeting, one-third of the directors must retire from the office by rotation. For the executives at the assistant vice president level to the level lower than the President, the Executive Committee is responsible for. Directors and Executives Remuneration The Company has remunerated the directors and executives base on the industry standard and reflect level. The remuneration for the Board of Directors shall be considered by the Remuneration Committee to be proposed to the Board of Director then to the shareholders for approval. A remuneration for an executive shall be consider from the Company’s operation results and accountability of an executive including his qualifications, knowledge, experience and his contribution. For the year 2012, the Board of Directors and the executives received money remuneration and other remuneration as follows.

Money Remuneration for the Directors The Remuneration for the Board of Directors

Chairman of the Board Vice Chairman of the Board Independent Director Director as non Executive Executive Director Chairman of the Audit Committee Audit Committee Chairman of the Executive Committee Executive Committee Chairman of the Remuneration Committee Attendance Remuneration per times Gratuity

The Remunerations per Month (Baht) 2012

40,000 20,000 30,000 30,000 10,000 10,000 5,000 10,000 5,000 Attendance Remuneration per times 5,000 Remuneration Committee 5,000 Yes

Note : On May 9, 2012, the Board of Directors Meeting of the 4/2012 approved the payment of remuneration to three Audit Committees at Baht 100,000 per person, totally Baht 300,000.

Money Remuneration for the Executives

The remunerations for the executives at total of Baht 10.24 million as salary, bonus and provident fund.

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Annual Report 2012


RESUME OF DIRECTORS Mr. Pleumjai Sinarkorn

Position : Director, Executive Committee

and Remuneration Committee Age (years) : 79 years Date of Birth : 25 January 1933 First Appointment : 19 February 2004 Number of Years : 8 years Education

MMP Chulalongkorn University Bachelor of Electrical Engineering, Rajamongkol University Directors Certification Program (DCP) Class No. 41/2004, Thai Institutions of Directors Association (IOD)

% of Holding No. of Shares % of Holding ESOP Warrant No. of units Relationship 5 Years’ Working Experience

2004-Present 2011-Present 2010-present 2009-Present 2008-Present 2007-2009 2007-Present 1998-2006 2002-2006

: 50,000 : : -

Director , Executive Committee, Remuneration Committee JTS Remuneration and Nomination Committee, Jasmine International Pcl. Director, Cloud Computing Solutions Co., Ltd. Advisor, Jastel Network Co., Ltd. Director, Jasmine International Pcl., Director, Triple T Global Net Co., Ltd., Director, Triple T Telecom Co., Ltd. Advisor, Thai Long Distance Telecommunications Co., Ltd Director, TT&T Subscriber Services Co., Ltd. Advisor to Executive Committee, Jasmine International Pcl. Executive Director, TT& T Pcl.

Jasmine Telecom Systems Public Company Limited

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Mr. Kriengsak Chalermtiragool

Position : Director and President Age (years) : 60 Years Date of Birth : 3 March. 1952 First Appointment : 27 July 2010 Number of Years : 8 years Education

Philosophiae Doctor of Electrical Engineering, University of Notre Dame Master of Electrical Engineering, University of Notre Dame Bachelor of Electrical Engineering , Auckland University Directors Certification Program (DCP) Class No. 146/2011, Thai Thai Institutions of Directors Association (IOD)

% of Holding No. of Shares : % of Holding ESOP Warrant No. of units : Relationship : 5 Years’ Working Experience

2010-Prsent 2510-Prsent 2008-Prsent 2007-Prsent 2006-2007 2003-2006 1994-2003 1992-1994 1976-1992

Director and President Director, Cloud Computing Solutions Co., Ltd. Advisor, Jasmine International Pcl. Advisor, Triple T Broadband Pcl. Advisor, JTS Vice President, Human Resource Department, Nation Multimedia Group Pcl. Senior Vice President, Human Resource Department and IT Department, Jasmine International Pcl. General Manager, Radio Phone Co., Ltd. Assistant Professor, Electrical Engineering, Faculty of Engineering, Chulalongkorn University

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Annual Report 2012


Mrs. Nonglug Pongsrihadulchai Position : Director Age (years) : 57 Year Date of Birth : 24 October. 1955 First Appointment : 27 July 2010 Number of Years : 2 years Education

Master of Agricultural Economics, Kasetsart University Master of Environmetal Management, Mahidol University Bachelor of Education, Chulalongkorn University Directors Certification Program (DCP) Class No.1471/2011, Thai Institutions of Directors Association (IOD) % of Holding No. of Shares % of Holding ESOP Warrant No. of units Relationship 5 Years’ Working Experience

2010-Present 2010-Present 2010-Present 2009-Present 2008-2009 2007-Present 2004-2007 1996-2004 1994-1996 1992-1994 1981-1992

: 50,000 : : : -

Director, JTS Director, Cloud Computing Solutions Co., Ltd. General Manager, Acumen Co., Ltd. Director, Triple T Broadband Pcl. Assistant Vice President Administration Department, Acumen Co., Ltd. Director, Triple T Internet Co., Ltd. Senior Manager, Administration Department, Acumen Co., Ltd. Manager and Senior Manager, Jasmine International Pcl. Assistant Manager and Manager, Administration Department, Acumen Co., Ltd. Executive Secretary, Postal Training Centre of Asia and Pacific Assistant Researcher and Economist, Center for Agricultural Development Plan of ASEAN

Jasmine Telecom Systems Public Company Limited

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Mrs. Nitt Visesphan

Position : Director Age (years) : 52 Years Date of Birth : 27 October. 1960 First Appointment : 27 July 2010 Number of Years : 8 years Education

Bachelor of Arts, Chiang Mai University

% of Holding No. of Shares % of Holding ESOP Warrant No. of units Relationship 5 Years’ Working Experience

2010-Present 2012-Present 2010-Present 1994-Present 1993-1994 1987-1993

: : : : -

Director, JTS Director, In Cloud Co., Ltd. Director, Cloud Computing Solutions Co., Ltd. Vice President, Financial Department, Jasmine International Pcl. Vice President, Administration Department, Ban Chang Group Assistant Manager, Patent Department, Tilleke and Gibbins Law Firm

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Annual Report 2012


Mr. Arporn Kengpol

: Independent Director, Chairman of Audit Committee and Chairman of Remuneration Committee Age (years) : 83 Year Date of Birth : 1 February 1929 First Appointment : 19 February 2004 Number of Years : 8 years Education M.S. in E.E. (Texas) Bachelor of Electrical Engineering, Chulalongkorn University Directors Accreditation Program (DAP) Class No. 28/2004, and Director Certification Program (DCP) Class No. 101/2008 Thai Institute of Directors Association (IOD) Audit Committee Program (ACP) Class No. 7/2005, Thai Institute of Directors Association (IOD) Position

% of Holding No. of Shares : - % of Holding ESOP Warrant No. of units : Relationship : 5 Years’ Working Experience

2004-Present 2010-present 2010-present 2010-present 2006-Present 2002-2006 1997-2002 1977-1990 1953-1990

Independent Director, Chairman of Audit Committee and Chairman of Remuneration Committee, JTS Director of University Council, Mahanakorn University of Technology Chairman of the Academic Committee of University Council, Mahanakorn University of Technology Chairman of the committee of Academic Position Assessment, Mahanakorn University of Technology Advisor, Council of Engineers Subcommittee, Council of Engineers Board Member and Subcommittee, Member of the Professional Engineer Control Board, Ministry of Interior Director, Broadcasting Station, Chulalongkorn University, Office the President, Chulalongkorn University Professor, Engineering Faculty, Chulalongkorn University

Jasmine Telecom Systems Public Company Limited

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Mr. Annop Suthakavatin

: Independent Director, Member of Audit Committee and Remuneration Committee Age (years) : 70 years Date of Birth : 28 April 1942 First Appointment : 19 February 2004 Number of Years : 8 years Position

Education

Bachelor of Accounting, Thammasat University Directors Accreditation Program (DAP) Class No. 1/2003 and Director Certification Program (DCP) Class No. 51/2004, Thai Institute of Directors Association (IOD) Audit Committee Program (ACP) Class No. 7/2005, MFR, MIR and MIA, Thai Institute of Directors Association (IOD) National Defence Collage (Government and Private Sector 388) % of Holding No. of Shares : - % of Holding ESOP Warrant No. of units : Relationship 5 Years’ Working Experience

2010-present 2004-Present 2004-Present 2003-Feb. 2010 2003-present 2001-Present 2000-Present 1998 1997 1993-1997 1971-1993 1971-present

: -

Remuneration Committee, JTS Independent Director and Audit Committee, JTS Independent Director and Chairman of Audit Committee, Chao Praya Insurance Plc. Independent Director and Chairman of Audit Committee, Professional West Technology (1999) Plc. Director, Rent A-V Co., Ltd. Independent Director and Audit Committee, Royal Orchid Hotel (Thailand) Plc. Advisor, Krung Thai Tractor Co., Ltd. Acting for Managing Director, Bangkok Asian Finance Ltd. Vice President, Audit and Analysis Department, Bangkok Motor Works Co, Ltd. Director and Deputy Managing Director, Bangkok Asian Finance Ltd. Auditor C.P.A. (Thailand), Shareholders, Director, Bancheekij Auditing Co,Ltd. Auditor C.P.A. (Thailand), Freelance

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Annual Report 2012


Mr. Monton Sudprasert

: Independent Director and Member of Audit Committee Age (years) : 52 years Date of Birth : 11 July 1960 First Appointment : 19 February 2004 Number of Years : 8 years Position

Education

% of Holding No. of Shares % of Holding ESOP Warrant No. of units Relationship 5 Years’ Working Experience

2004-Present Oct.,2012-Present Oct.,2012-Present 2010-2012 2009-2010 2005-2009 2003-2005 2001-2003 2000 1998-2000 1995-1998 1992-1994 1987-1992 1985-1986 1985

Master of Public Administration, Chulalongkorn University Master of Engineering, Chulalongkorn University Directors Accreditation Program (DAP) Class No. 28/2004, and Director Certification Program (DCP) Class No. 101/2008 Thai Institute of Directors Association (IOD) Audit Committee Program (ACP) Class No.11/2006, Thai Institute of Directors Association (IOD) : - : : -

Independent Director and Audit Committee, JTS Director, Mass Rapid Transit Authority of Thailand Director General, Department of Public Works and Town & Country Planning, Ministry of Interior Deputy Director General, Department of Public Works and Town & Country Planning, Ministry of Interior Director of Town and Country Development Bureau, Department of Public Works and Town & Country Planning, Ministry of Interior Professional Engineer Level 9, Department of Public Works and Town & Country Planning, Ministry of Interior Secretary, Engineer Level 8, Department of Public Works and Town & Country Planning, Ministry of Interior Professional Engineer Level 8, Department of Public Works and Town & Country Planning, Ministry of Interior Professional Engineer Level 7, Department of Public Works and Town & Country Planning, Ministry of Interior Engineer Level 7, Public Works, Ministry of Interior Engineer Level 6, Public Works, Ministry of Interior Engineer Level 5, Public Works, Ministry of Interior Engineer Level 4, Public Works, Ministry of Interior Engineer Level 3, Public Works, Ministry of Interior Engineer Level 3, Town & Country Planning, Ministry of Interior

Jasmine Telecom Systems Public Company Limited

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Name of Directors JTS CCS Associates 1 2 3 4 5 6 7 8 9 10 11

1. 2. 3. 4. 5. 6. 7.

Mr. Pleumjai Sinarkorn I,II I I I I I I Mr. Kriengsak Chalermtiragool I,III I Mrs. Nonglug Pongsrihadulchai I I III I I Mrs. Nitt Visesphan I I III I Mr. Arporn Kengpol I Mr. Annop Suthakavatin I Mr. Monton Sudprasert I

Associates Company

1. Jasmine International Pcl. 2. Acumen Co., Ltd. 3. TT&T Pcl. 4. Thai Long Distance Telecommunications Co., Ltd. 5. Triple T Broadband Pcl. 6. Jastel Network Co., Ltd. 7. TT&T Subscriber Services Co., Ltd. 8. Triple T Internet Co., Ltd. 9. Triple T Global Net Co., Ltd. 10. Triple T Telecom Co., Ltd. 11. In Cloud Co., Ltd. Remarks : X = Chairman / = Director // = Executive Committee /// = Executive

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Annual Report 2012


Corporate Governance

The Company’s Board of Directors is entitled to set up Corporate Governance which encompasses 5 major principles to be in line with the guideline of the Stock Exchange of Thailand, the details of which are as the followings. 1. The Rights of Shareholders The Company is well aware that all the fundamental rights of the shareholders both as investors and company owners must be significantly recognized. Such rights include the right to sell, purchase or transfer the securities they hold, the right to receive the Company’s profits sharing, the right to adequately receive the Company’s information, the right to attend the shareholders’ meeting wherein they can express their opinions and vote on resolutions on the Company’s significant matters; for instance, the dividend payment, the appointment or dismissal of a director, the appointment of the external auditors, the approval of any crucial transaction which might affect the directions of the Company’s operation, the amendment on Memorandum of Association or Articles of Association and so on. Moreover, to support and facilitate the shareholders in exercising their rights as follows; 1. The Company manages to arrange the Shareholders’ Annual General Meeting within the first 4 months of the Company’s fiscal year. As for the so called “Extraordinary Shareholders’ Meeting”, each will be called for only when it is deemed appropriate. Invitation letters together with the meeting agenda and related documents with adequate fact(s), reason(s) and opinion(s) of the Board of Directors will be distributed for the shareholders to consider 7 or 14 days prior to the meeting date, depending on the subjects. The Company will also advertise the Meeting notice in the press 3 days consecutively before the date of meeting. 2. Provided that a shareholder is unable to attend the meeting in person, the Company allows him/her to assign an independent director or any person to attend and vote on his/her behalf. To this regard, the shareholder as the Proxy Grantor must inform the Company in writing by filling in one of the proxy forms attached with the meeting invitation letter or downloaded from the Company’s website. 3. During the meeting, the Company provides equal opportunities for the shareholders to make enquiries or to express their views. Therein, all the Company’s directors and relevant management are present to be acknowledged of the shareholders’ opinions as well as to answer the questions raised. Every questionand-answer issue and all the significant opinions are recorded in the minutes of meeting to facilitate the shareholders’ scrutiny. 4. After the meeting finished, the Company shall arrange the minutes that present the complete and accurate information for the shareholders to review. 2. The Equitable Treatment of Shareholders The Company has a policy to treat all the shareholders equally whether the major shareholders, minor shareholders, institutional investors or foreign investors. Independent directors are assigned by the Company to be responsible for looking after the minor shareholders. The shareholders’ meeting is properly conducted according to the scheduled agenda in respect of the Company’s Articles of Association. Related information is clearly presented. No un-informed agenda is introduced to the meeting neither is an important agenda which the shareholders need some time to make a prudent study Jasmine Telecom Systems Public Company Limited

34


before making a decision. In case that a shareholder is unable to attend the meeting in person, the Company allows him/her to assign an independent director or any person to attend and vote on his/her behalf. To this regard, the shareholder as the Proxy Grantor must inform the Company in writing by filling in one of the proxy forms attached with the meeting invitation letter or downloaded from the Company’s website. Voting process is transparent with regard to the order of agenda items. During the meeting, the shareholders are entitled to cast the vote to express their agreement or disagreement or even to abstain from voting on such issues as related transactions, the acquisition or the disposal of the Company’s assets and so on. The agenda on director election provides the shareholders with the chance to elect the directors as individual persons to replace the ones who retire by rotation. The Company has business ethics for the employees, stipulating the importance of keeping the information of both the Company and its subsidiaries in confidence. It has also set up penalty for any staff who makes use of the inside information for his/her own benefits or implement the same in the manner that may damage the Company’s reputation. Additionally, the trading or transferring of the Company’s securities by using confidential information and / or inside information is prohibited in the like manner as the conduct of juristic act, using the Company’s confidential information and / or inside information since such doing may cause damage to the Company either directly or indirectly. The Company has set up a measure to prevent the improper “insider Trading” by relevant persons who are directors, executives, and staff working in the department related to the inside information (including their spouses and minors). According to the measure, such relevant persons are not allowed to trade the Company’s securities a month before the disclosure of the quarterly and annual financial statements. The Company has informed its directors and executives not only of their duty to report their holding of the Company’s securities but also the penalty according to the Securities and Exchange Act of B.E.2535 and the regulations of the Stock Exchange of Thailand. In case that the directors or executives trade the Company’s securities which they hold, they are obliged to report changes in the possession of their own securities, spouses and minors to the Office of Securities Exchange Commission to comply with Section 59 of the Securities and Exchange Act of B.E.2535 within 3 working days so that it is further disclosed to the public. Pertaining to this matter, the Company has set up the disciplinary penalty to apply to any relevant person who discloses or makes use of the Company’s inside information for seeking his / her own personal interests. The degree of penalty varies, according to the case, from verbal warning, written warning to probation or dismissal. 3. The Role of Stakeholders The Company equally respects the rights of all the stakeholders whether they are the inside stakeholders such as the Company’s employees and management or outside-party stakeholders such as creditors and customers, etc. It also realizes that the support and suggestions from every group of its stakeholders are valuable and beneficial to both the operation and business development. Therefore, it will perform the duty to comply with the law and other related regulations to ensure that all the rights of the stakeholders are handled with proper care. Moreover, for the Company’s stability, the cooperation between the Company and all the groups of stakeholders are strongly supported. With respect to this, the Company follows the directions below to appropriately treat each stakeholder group. Shareholders : With the aim to bring about the highest satisfaction to its shareholders, the Company intends to be their ever efficient and trustworthy business representatives, taking into account the long term growth of its value and the emphasis on transparent and honest information disclosure.

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Annual Report 2012


Employees : The Company regards employees as its precious resources. So, it focuses on supporting human resources development which consequently leads to its maximum benefit. Besides, it encourages the employees to play a part in creating a good organization culture, strong teamwork and safe and pleasant working atmosphere. Competitors : The Company commercially contends with other trade competitors on the fair and ethical competition basis. Customers : The Company is committed to responding and providing quality services for the highest satisfaction and confidence of the customers. Trade Counterparts : The Company has the policy to treat both the counterparts and the creditors and Creditors fairly in compliance with trading conditions and / or terms in the mutual contracts to enhance good business relationship, beneficial to all parties. Community and : On the regular basis, the Company joins and sponsors socially constructive projects Public and activities as exemplified by financial and material donations to several foundations and organizations. Environment : The Company recognizes the importance of environment is concerned about the impact of pollutions on communities. However, the Company’s nature of business does not jeopardize the environment. The Company will conduct its business to be in line with the law and other related regulations to assure the shareholders of the best protection of their rights. 4. Disclosure and Transparency The Company’s Board of Directors takes as its obligation the disclosure of the Company’s financial and other Company-related information to be complete, accurate, and transparent in compliant with the regulations of the Office of Securities Exchange Commission and the Stock Exchange of Thailand. Additionally, it discloses other significant information which may affect the price of the Company’s securities which in turn impacts on the decision of the Company’s investors and stakeholders. Such information is accessible to the Company’s shareholders, investors and the public via the channels and media of the Stock Exchange of Thailand as well as the Company’s website. For Investor Relations, the Company has an IR Team to represent the Company in communicating with institutional investors, shareholders, analysts and relevant state organizations; whereas, the Corporate Secretary Administration Section is accountable for corporate reports. The Company’s Board of Directors is responsible for the consolidated financial statements of the Company and its subsidiaries as well as any financial-related information presented in the Company’s Annual Report. Such financial statements are prudently prepared pursuant to the accounting principles generally accepted country-wide based on the appropriate accounting policy to which the Company regularly conforms. The Audit Committee is obliged to verify the quality of the Company’s financial reports and internal control system, including the adequacy of the disclosure of important information in notes to the financial statements prior to submitting all to the Board of Directors’ and the Shareholders’ meetings respectively. Jasmine Telecom Systems Public Company Limited

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5. Responsibilities of the Board of Directors 1. Structure of the Board of Directors The Board of Directors of the Company is made up of individuals recognized for their knowledge and capabilities. It plays the vital role in setting up the corporate policy and image besides independently overseeing, auditing, and assessing the Company’s performance to be in accordance with the Business Plan. The Board of Directors totally comprises 7 directors, 3 of whom are independent directors. The appointment of the independent directors in such adequate and proper proportion enables the balance of power in the Board of Directors. The Company’s administration is finally examined by the Audit Committee which consists of 3 accredited independent members. According to the Company’s Articles of Association, at every Shareholders’ Annual General Meeting, one-third of the directors who have the longest terms shall retire. Nevertheless, provided that the number of the directors is not a multiple of three, then the number nearest to one-third shall retire from office. The retirement of the directors in the first and the second year after the listing of the Company on the Stock Exchange of Thailand is based on the method of lot-drawing. As for the later years, the directors who serve the longest terms shall retire. The Company’s Articles of Association also prescribes that the retired directors are eligible for the re-election. Furthermore, whether a director or a committee member can continuously remain in office without break for the longest period will be determined by the Company by taking into account his / her individual qualifications and appropriateness. The Board of Directors has approved to embrace the disclosure of the number of other companies in which each director has his / her position as a significant criterion for the Board of Directors election. The Company; thus, discloses the information of all the directors who also are directors of other companies in details. At present, 2 directors of the Company’s Board of Directors are holding the positions of director in other companies. However, since those directors have sufficiently devoted their time carrying out the Company’s tasks with all their efforts, the holding of their positions in other companies does not affect their performance at all ; moreover, they regularly join the Board of Directors’ meetings of the Company and always provide practical opinions for the Company therein.

2. Committee

To bring about efficiency in corporate governance, the Company established 3 sets of committee, namely the Audit Committee, the Executive Committee and the Remuneration Committee. It has also set up distinct scopes of authority, duty and responsibility for the members of such committees. 3. Role, Duty, and Responsibility of the Board of Directors

The Company’s Board of Directors is made up of individuals who are knowledgeable, proficient, expert and well equipped with beneficial experiences in various fields apart from distinguished leadership. They collectively set visions, missions, strategies and business directions in addition to providing efficacious oversight of the Company’s operation to fully comply with all the relevant laws and to correspond to the objectives and regulations of the Company as well as the resolutions of the shareholders’ meeting. They also set up committees to monitor and supervise the Company’s operation.

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Annual Report 2012


Business Ethics

The Company has the business ethics as an essential guideline for the Board of Directors, the management and employees of all levels to adhere so as to conduct their missions and serve all the groups of stakeholders fairly and honestly. Besides, the Company has announced such business ethics including punishment, and acknowledged them to the employees for strict compliance. Conflict of Interest The Company’s Board of Directors has set up the policy on conflicts of interest based on the principle that any decision on business conduct must be made with respect to the highest interests of the Company only. Any action which might lead to conflicts of interest must be avoided. It is specified that any person relevant or related to the subject to be considered is obliged to acknowledge the Company of his / her relationship or relevance to the matter. He / She is not permitted to join the party which judges the case and does not have the power to authorize that particular case and others. No conditions or regulations are specially set for such case. It is also stipulated that the Office of Internal Audit and the Audit Committee are responsible for taking care of and solving the conflicts of interest. However, to date, the Company has not experienced the problem related to the conflict of interest. The Audit Committee will report the carefully considered related party transaction and the matter containing a conflict of interest to the Board of Directors in compliance with the regulations of the Stock Exchange of Thailand. Such information is disclosed in the Company’s Annual Report and the Updated Registration Statement (56-1 Form). Whenever changes in the securities holding of the Board of Directors and the management of the Company, including their spouses and minors occur, they must be informed to the Company and reported to the Office of Securities Exchange Commission, respectively according to Section 59 of the Securities and Exchange Act of B.E.2535 within 3 working days after the date of purchase, sale or transfer. Besides, to prevent the improper usage of the Company’s inside information, the directors, executives and departments having an access to the Company’s inside information are forbidden from disclosing such information to the outside parties and anyone who does not involve in the Company’s securities trading a month prior to the disclosure of the Company’s financial statements. Internal Control System Realizing the importance of the efficient internal control system of both the management and the operation levels, the Company has specified the scopes of the duty and the authority for its executives and employees clearly in writing. It also conducts the control of assets usage. In addition, the duties of the staff and those of the monitoring and assessment officers are segregated from each other. The Audit Committee has been set up by the Company to oversee and monitor such control system to be appropriate and efficient. Risks Management The Company evaluates the adequacy of its internal control system on a yearly basis in order to find the way to properly improve the task operation to be increasingly effective.

Jasmine Telecom Systems Public Company Limited

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Report of the Board of Directors Audit Committee is accountable for the review of the financial report. Quarterly, such report will be presented to the Board of Directors by the Accounting and Finance Department. The joint meeting between the relevant staff and the management of the Accounting and Finance Department and the Company’s auditors is scheduled at least once a year. The Board of Directors is responsible for the consolidated financial statements of the Company and its subsidiaries as well as the financial information (the report on the Board of Directors’ responsibilities for financial matters) presented in the Annual Report. Such financial statements are prepared in accordance with the accounting principles certified and verified with prudence by the Company’s auditors. The disclosure of significant financial-related or non-financial related information is completely and regularly done on the factual basis.

4. Board of Directors’ Meeting

The Company’s Board of Directors’ meeting is scheduled to be convened once every 3 months. However, aspecialmeetingcanbecalledifitisdeemednecessary.Theagendaitemsforeachmeetingareclearandspecific. Documents concerned are sent to the directors prior to the meeting date in order to provide them with sufficient time of study, except for the emergency case. The meeting is recorded in writing. The minutes as well as other certified documents are kept for references and all must be examinable in the following meeting. The Chairman and the President of the Company jointly consider the issues to be included in the meeting agenda. To this regard, each director can also suggest issues for the Chairman and the President to consider for agenda preparation. During the meeting, the Company’s Chairman, as the Chairman of the Board of Directors’ meeting, will provide opportunities for the directors to independently express their opinions. Sometimes, the Company’s senior executives are invited to join the meeting for the provision of additional useful information for some particular agendas. On this occasion also that they can be directly acknowledged of the policy and put it into practice accordingly and efficiently. Decisions are based on a majority vote of the Board members attending the meeting; one director is eligible for one vote. However, a director who has some interests in the matter under consideration shall not join the meeting and / or abstain from voting for it. In case of tie, the Chairman has the casting vote. In Board of Directors’ meeting, the President shall be the Secretary to the Board of Directors and shall take the minutes. The minutes shall be proposed to the chairman of the meeting to be considered and signed for certification and shall be submitted for verification as the first agenda in the following meeting of the Board of Directors. The meeting documents and minutes are kept with respect to the related law by the Corporate Secretary Administration Section.

39

Annual Report 2012


Related Party Transactions The Company has entered the Related Parties Transactions defined in the Notification of the SEC. For the year 2012, the transactions were in compliance with the terms and conditions in the contracts made between the Company and its subsidiary on normal business practice (as referred to in Clause 7 of Notes to the Financial Statements for the Year 2012). The Company has reasonably and accordingly carried out the transactions for its own optimum benefits. To This regard, the Audit Committee has reviewed the prices or ratio of such transactions with the Company‘s officers and internal auditor and finally agreed that they were appropriate and accurately disclosed in the Company’s financial statements. The approval procedure of related party transactions was of the same criteria as the general procurement procedure. The Company’s management and the shareholders have neither interest in nor approval authority on related transactions matter. Details are as follows: 10.1 In 2012, the Company and its subsidiary executed the following transactions of product sale, service offering, and others with the following connected person: Connected Person Relationship Type of Related Party Transaction

Amount (Million Baht) as at 31 December 2012

1. Jasmine Group , Comprising 1) Jasmine International PCL. - ACU rental public telephone 0.72 1) Acumen Co., Ltd.(“ACU”) (“JAS”) is a major shareholders and maintenance test 2) Triple T Broad Band PCL. of Jasmine Telecom Systems equipment contract (“TTTBB”) PCL. (“JTS”), holding 32.799% 3) Jastel Network Co., Ltd. 2) Has the same director as - The Company provided the 10.81 (“Jastel”) JAS, namely supplies and services for respect 1. Mr.Pleumjai Sinarkorn to the Universal Service Obligation or USO ruled by NBTC to TTTBB - The Company provided the 1.30 supplies and services for respect to the Universal Service Obligation or USO ruled by NBTC to Jastel Network 2. Subsidiary, Comprising 1) JTS is a major shareholders - Its subsidiary provided the 3.31 1) Cloud Computing of CCS, Holding 97.87% Cloud Infrastructure Service Soloutions Co., Ltd.(“CCS”) to Acumen 2) Has the same directors as - Its subsidiary sold equipment 24.80 JTS, Namely and development Broadband 1. Mr. Pleumjai Sinarkorn Customer System (BCS) 2. Mr.Kriengsak Chalermtiragool to TTTBB 3. Mrs.Nonglug Pongsrihadulchai - Its subsidiary provided the 2.57 4. Mrs.Nitt Visesphan maintenance service of radius system and the Cloud Infrastructure Service to TTTI

Jasmine Telecom Systems Public Company Limited

40


10.2 In 2012, the Company and its subsidiary transacted the product and equipment procurement,

including payment for leases and serviced from related parties as follows :-

Connected Person Relationship Type of Related Party Transaction

Amount (Million Baht) as at 31 December 2012

1. Jasmine Group, Comprising 1) JAS is a major shareholder - The Company entered into Rental 6.10 1) Acumen Co., Ltd. of JTS, holding 32.799% and Service Contact with JAS and 2) Premium Assets Co., Ltd. 2) Has the same directors as other expense such as training (“PA”) JAS, namely expense, service expense, 3) Triple T Broadband PCL 1. Mr. Pleumjai Sinarkorn advertising expense etc. (“TTTBB”) - The Company rent warehouse 3.61 4) Triple T Internet Co., Ltd. space on the ground floor with PA, (“TTTI”) including cleaning service and 5) Jastel Network Co., Ltd. security contract - The Company appointed ACU 2.78 to provide consultant and shipping service for import goods and equipment and provide service of IP star - The Company appointed TTTBB 64.35 to provide Voice Telephone and entered into provide the service for respect to the Universal Service Obligation or USO of Payphone and Internet system for year 2553 to CAT Telecom - TTTI to provide internet 0.31 2. Subsidiary , Comprising 1) JTS is a major shareholders - Its subsidiary entered into rental 2.18 1) Cloud Computing of CCS, holding 97.87% and service contract with JAS, Solutions Co., Ltd. 2) Has the same directors as and other expense such as JTS, Namely Training expense, Service Expense, 1. Mr. Pleumjai Sinarkorn advertising expense etc. and 2. Mr.Kriengsak Chalermtiragool management contract 3. Mrs.Nonglug Pongsrihadulchai - Its subsidiary entered into security 1.69 4. Mrs.Nitt Visesphan service and cleaning service contract with PA, Including utilities expense and other expense - TTTI to provide internet service 0.23 - Jastel to provide internet service 0.67

41

Annual Report 2012


Financial Status

and operating results (Management Discussion & Analysis) Overall Operating Results In 2012, the Company and its subsidiary have the total revenue of Baht 1,226 million, operating profit of Baht 67 million and net loss of Baht 178 million which the Company has the total revenue of Baht 1,167 million, operating profit of Baht 82 million and net profit of Baht 34 million and its subsidiary has the total revenue of Baht 64 million, operating loss of Baht 16 million and net loss of Baht 214 million. The Company and its subsidiary have the total revenue of Baht 1,226 million decreasing by Baht 197 million or 13.86% from 2011 and net loss of Baht 178 million increasing by Baht 111 million or 164.17% from 2011 which the most of revenue reduced by telecom systems integration business decreasing by Baht 85 million or 7.18% from 2011 and telecom services business decreasing by Baht 48 million or 80.53% from 2011 due to some projects will recognize the revenue in 2013. Revenue Structure and Operating Results

Type of Business Consolidated 2012 2011

Telecom Systems Integration Telecom Services Business Computer Systems Integration Total Sales and Services

1,104.42 11.70 63.02 1,179.13

1,189.88 60.10 69.71 1,319.69

(Unit : Million Baht) Changed % Changed

(85.46) (48.40) (6.70) (140.56)

(7.18) (80.53) (9.61) (10.65)

Other Income Total Revenue

46.61 1,225.74

103.35 1,423.05

(56.74) (197.30)

(54.90) (13.86)

Net Profit & (Loss)

(178.36)

(67.51)

(110.84)

164.17

Earnings per Share (Baht/Share)

(0.25)

(0.10)

(0.16)

163.80

Gross Profit *** Operating Profit Weighted Average Number of Ordinary Shares (million shares)

255.81 66.72

706.46

256.96 64.55

705.45

(1.15) 2.17 1.01

Remarks: ***Gross Profit is a result of sales and service income minus sales and service cost.

Jasmine Telecom Systems Public Company Limited

42

(0.45) 3.35 0.14


Revenue Structure In 2012, the Company and its subsidiary have the total revenue of Baht 1,225.74 million decreasing by Baht 197.30 million or 13.86% from 2011. This comprised from sales and services from telecom systems integration of Baht 1,104.42 million or 90.10%, telecom services business of Baht 11.70 million or 0.96%, computer systems integration of Baht 63.02 million or 5.14%, and other revenue of Baht 46.61 million or 3.80%. The most of totaling of revenue generated from sales and services from telecom systems integration by 93.66% of totaling sales and services. Operating Results In 2012, the company and its subsidiary have operating profit of Baht 66.72 million increased by Baht 2.17 from 2011 and net loss of Baht 178.36 million increased from that of the previous year by Baht 110.84 million or 164.17% and would like to report the operating results as detailed below. For the Company The operating profit of the Company for the year 2012 of Baht 81.74 million Baht, compared to that of Baht 88.82 million of the year 2011, decreasing by Baht 7.08 million. This was mainly due to the Company set up a provision for potential losses on debt restructuring and impairment losses on investment in TT&T for debt payment received by way of debt-to-equity conversion scheme in accordance with the rehabilitation plan of TT&T of Baht 12.27 million (Such provision was set up based on the difference of TT&T share price that was from 0.13 Baht per share to 0.00 Baht per share.) The provision has covered the entire number of shares from debt-to equity conversion. The Company set up an allowance of Baht 24.68 million Baht for doubtful debt of TT&T and an allowance of Baht 22.58 million for losses on other asset impairment. Hence, the net profit of the year 2012 of the Company of Baht 34.47 million, compared to the net profit of the year 2011 of Baht 30.11 million, increased by Baht 4.36 million or 14.47%

43

Annual Report 2012


For the Subsidiary The operating loss of the subsidiary for the year 2012 of Baht 15.73 million, compared to that of Baht 26.39 million of the year 2011, decreased by Baht 10.66 million. This was mainly due to the subsidiary set up a provision for potential losses on debt restructuring and impairment losses on investment in TT&T for debt payment received by way of debt-to-equity conversion scheme in accordance with the rehabilitation plan of TT&T of Baht 31.40 million (Such provision was set up based on the difference of TT&T share price that was from 0.13 Baht per share to 0.00 Baht per share.) The provision has covered the entire number of shares from debt-to equity conversion. The subsidiary set up an allowance of Baht 167.03 million for doubtful debt of TT&T. Hence, the net loss of the year 2012 of the subsidiary was 213.53 million Baht. Expenses

Items Consolidated 2012 2011

Cost of Sales and Services Selling and Service Expenses Administrative Expenses Losses on Debt Restructuring Potential Losses on Debt Restructuring Doubtful Debt Loss on Impairment of Investment Loss on Impairment of Asset

Total Expenses

923.33 25.01 112.78 - 32.75 191.71 10.92 22.58

1,319.07

1,062.74 26.76 132.30 24.71 99.33 - - -

1,345.84

(Unit : Million Baht) Changed % Changed

(139.41) (1.75) (19.51) (24.71) (66.58) 191.71 10.92 22.58

(26.77)

(13.12) (6.54) (14.75) 100.00 (67.03) 100.00 100.00 100.00

(1.99)

Cost of Sales and Services In 2012, the company and its subsidiary have cost of sales and services amounted to Baht 923.33 million, decreased from that of the previous year by Baht 139.41 million or 13.12% due to decreased of sales and services by Baht 140.56 million. Selling, Servicing and Administrative Expense In 2012, the company and its subsidiary have selling and service expense amounted to Baht 138 million decreased from that of the previous year by Baht 21 million or 13.37% due to the company have selling, servicing and administrative expense amounted to Baht 115.66 million, decreased by Baht 18.60 million or 13.85% due to the subsidiary restructured organization and decreased headcount by 55 person to 14 person from 69 person from that of the previous year.

Jasmine Telecom Systems Public Company Limited

44


Finance Cost In 2012, the company and its subsidiary have finance expense of Baht 60 million decreased from that of the previous year by Baht 67 million or 52.55% due to repayment short-term loans and long-terms. Gain and Loss on Exchange Rate

In 2012, the company and its subsidiary have gain on exchange rate of Baht 12.88 million.

Financial Status

Assets as at 31 December 2012 and 2011

(Unit : Million Baht) Items Consolidated Changed % Changed 31/12/2012 31/12/2011

Current Assets

2,518.92

Non-current Assets 180.17 Accounts receivable under troubled debt restructuring 94.46 Property, plant and equipment-net 17.34 Others non-current assets 68.37

Total Assets

4,032.57

258.22 138.54 23.05 96.63

(1,513.65) (78.05) (44.09) (5.71) (28.26)

(37.54)

(30.23) (31.82) (24.76) (29.24

2,699.09 4,290.79 (1,591.70) (37.10)

As at the end of the fiscal year 2012, the Company and its subsidiary have total assets of Baht 2,699 million decreased by Baht 1,592 million or 37.10%. This is mainly due to the decreasing of account receivable by Baht 1,419 million or 53.05%, decreasing of inventory by Baht 21 million or 31.35%, decreasing of other current assets by Baht 67 million or 63.92%, decreasing of restricted bank deposits by Baht 17 million or 21.18%, decreasing of property, plant and equipment-net by Baht 6 million or 24.76% and accounts receivable under troubled debt restructuring recorded under the rehabilitation plan decreasing by Baht 44.08 million or 31.82% and the company and its subsidiary record potential losses on debt restructuring of Baht 32.75 million (the company only of Baht 1.67 million ) and making non-current assets decreasing by Baht 78 million or 30.23%.

45

Annual Report 2012


Liabil ities as at 31 December 2011 and 2010

(Unit : Million Baht) Items Consolidated Changed % Changed 31/12/2012 31/12/2011

Current Liabilities Non-current Liabilities Long-Term Loans-net of current portion Provision for Long-Term Employee Benefits Total Liabilities

1,197.31 250.87 231.74 19.13 1,448.18

2,556.51 (1,359.20) 265.42 (14.55) 246.22 (14.48) 19.20 (0.06) 2,821.93 (1,373.75)

(53.17) (5.48) (5.88) (0.32) (48.68)

As at the end of the fiscal year 2012, the company and its subsidiary have total liabilities amount to Baht 1,448 million decreased by Baht 1,374 million or 48.68%. This was mainly due to decreased of current liabilities by Baht 1,359 million, this comprised from short-term bank loans decreased by Baht 5 million, Trust receipts decreased by Baht 151 million, trade and other payables decreased by Baht 1,128 million, accrued project cost decreased by Baht 47 million , current portion of long term loans decreased by Baht 61 million, long term loan decreased by Baht 14 million due to the subsidiary repayment loan to local bank .and the accounting standard TAS 19 Employee Benefits the company and its subsidiary record cumulative provision for long-term employee benefits by Baht 19 million.

Shareholders’ Equity as at 31 December 2012 and 2011

(Unit : Million Baht) Items Consolidated Changed % Changed 31/12/2012 31/12/2011

Paid up Capital Shares Share Premium Retained Earnings Legal Reserve Un-appropriated Total Shareholders’ Equity Book Valued

706.46 420.27 123.71 64.91 58.80 1,250.91 1.77

706.46 420.27 337.10 63.19 273.92 1,468.86 2.08

0.00 0.00 (213.41) 1.72 (215.13) (217.95) (0.31)

0.00 0.00 (63.30) 2.73 (78.54) (14.84) (14.84)

As at the end of the fiscal year 2012, the Company and its subsidiary have total shareholders’ equity amount to Baht 1,251 million decreasing by Baht 218 million or 14.84%. This was mainly due to operating results in year 2012 had net loss of Baht 178 million (for the Company only : net profit of Baht 34.47 million), recorded to adjustment of unrecognized actuarial loss for long-term employee benefits in the retained earnings of Baht 3.57 million and on November 7, 2012 the Board of Directors approved for payment of interim dividend for 2012 of Baht 0.05 per share from retained earnings totaling Baht 35.32 million which paid on December 4, 2012, the Company has legal reserve amount to Baht 1.72 million. Jasmine Telecom Systems Public Company Limited

46


Liquidity Cash flow

In 2012, the Company and its subsidiary have net cash flow from operating activities amount to Baht 350 million. This was mainly due to receive money from telecom services business amount to Baht 1,254 million, money spent on purchased of equipment for implementation of the projects amount to Baht 1,151 million and net cash flow used in investing activities by Baht 77 million and net cash flow used in financing activities by Baht 267 million due to re-payment of short-term and long-term loans amount to Baht 80 million and dividend paid amount to Baht 35 million. As a result, cash and cash equivalents at the end of year 2012 was amount to Baht 317 million increasing by Baht 9 million of the previous year (excluded restricted bank deposits amount to Baht 64 million).

Liquidity and Capital Structure

Item

Liquidity Ratio Current Ratio (times) Quick Ratio (times) Capital Structure Debt to Equity (times)

31/12/2012 31/12/2011

2.10 1.95

1.58 1.43

1.16

1.92

As at 31st December 2012 and 2011, the current ratio was 2.10 times and 1.58 times, respectively, and the quick ratio was 1.95 times and 1.43 times, respectively, which was a result of trade account receivable decreased by Baht 1,491 million and current liabilities decreased by Baht 1,359 million As at 31st December 2012 and 2011, the debt to equity was 1.16 times and 1.92 times, respectively , This was mainly due to of total liabilities decreased by Baht 1,374 million and shareholders’ equity decreased by Baht 218 million due to net loss on operating results of Baht 178 million (the company only : net profit of Baht 34.47 million ), interim dividend payment totaling Baht 35 million, The capital structure as at 31st December 2012 comprised the total liabilities of Baht 1,448 million and the shareholder’s equity of Baht 1,251 million.

47

Annual Report 2012


Operating Results Unit : Million Baht

1600 1400

1,423.05 1,319.69

1,225.74 1,179.13

1200 1000

Total Revenue Total Sales&Services Operation profit Net Profit

800 600 400 200 -200 -400

66.72

64.55 2011

67.51

2012

178.36

Reveue Structure 2011

7.26%

Other Income

83.62%

Telecom Systems Integration Business

4.22%

Telecom Service Business

4.90% Computer Systems Integration Business

Jasmine Telecom Systems Public Company Limited

48


Reveue Structure 2012

3.80% Other Income

90.10%

Telecom Systems Integration Business

5.14%

Telecom Service Business

0.96% Computer Systems Integration Business

Financial Status Unit : Million Baht

5,000

4,290.79

4,000 3,000 2,000

2,821.93 1,468.86

1,000 -

31/12/11

2,699.09 1,448.18 1,250.91

Total Revenue Total Sales&Services Net Profit

31/12/12

49

Annual Report 2012


Report of Audit Committee The Audit Committee of Jasmine Telecom Systems Public Company Limited (“the Company”) consists of the following three qualified independent directors: 1. Professor Arporn Kengpol Chairman of the Audit Committee 2. Mr..Annop Suthakavatin Member of the Audit Committee 3. Mr. Monton Sudprasert Member of the Audit Committee Their functions and qualifications are properly in accordance with the regulations stipulated in an announcement of the Securities and Exchange Commission (“SEC”). Mr.Annop Suthakavatin, a member of the Audit Committee, is well versed and well experienced in reviewing the reliability of the financial statements. In 2012, the Company organized twelve Audit Committee meetings in which executives, external auditors and internal auditors joined when their responsibilities were related to the agenda. The Audit Committee has performed its duties assigned by the Board of Directors to support the Company’s operation to be in accordance with the principles of good corporate governance in line with the Company’s code of ethics, financial statement oversight, risk management evaluation, internal control system review and the internal audit review, as summarized below. Accuracy, completeness, and credibility of financial reports The Audit Committee reviewed the 2012 financial statements and notes to the financial statements of the Company and the subsidiary prepared quarterly and annually by the external auditors and the management to ensure that they were in accordance with legal requirements and generally accepted accounting standards and that the information disclosure of such financial statements was complete, adequate, and reliable. For the Company’s optimum benefit, the Audit Committee also made significant remarks and provided problem-solving suggestions. Finally, the Audit Committee agreed that the Company’s financial reports were correct, complete, and reliable, in line with the generally accepted accounting standards.

Adequacy of internal control system and internal audit

Related transactions or transactions that may have conflicts of interest

The Audit Committee reviewed the audit result report prepared by the Company’s external auditors and the report on internal control system prepared by Office of Internal Audit by focusing on resource utilization, due care of properties, and prevention or minimization of defects, losses, and waste. It also investigated the reliability of financial and operation reports as well as compliance with laws, rules and regulations to ensure the existence of an appropriate internal control system in each unit of the Company. As for internal audit, the Audit Committee assigned Office of Internal Audit to provide annual audit plan, audit result report, and follow-up report. It also provided Office of Internal Audit and the management with recommendations that helped generate more efficient operation and continuity of effective follow-up of any task significantly required in the audit plan and the expansion of audit scope to cover the subsidiary. Finally, the Audit Committee agreed that the Company’s internal control system was adequate and appropriate and that its internal audit was appropriate and effective. The Audit Committee reviewed the disclosure of related transactions that might lead to conflicts of interest with the Company to ensure that they were actual transactions, taking place during a normal course of business. The Audit Committee, finally, agreed that such related transactions were within the scope of normal course of business with normal conditions that were sensible and fair for the best interests of the Company and that for this matter, the Company completely complied with the regulations of the Stock Exchange of Thailand (“SET”) and the policy of good corporate governance. Jasmine Telecom Systems Public Company Limited

50


Good corporate governance

Risk management

The Audit Committee supervised the Company to disclose its information adequately and accurately besides supporting good governance and good management systems to enhance transparency and ethical awareness so as to create confidence among shareholders, investors, employees and all other relevant parties. Finally, the Audit Committee agreed that the Company completely complied with the regulations of the SET and the policy of good corporate governance. The Audit Committee reviewed the policy, procedure, and progress of risk management both in the levels of organization and department to ensure that the Company managed its risks effectively and was able to curtail the risks to an acceptable level in addition to providing proper connection with internal controls. Finally, the Audit Committee agreed that the Company’s risk management was efficient and in line with the risk management measures. Compliance with securities and exchange law, SET regulations, and relevant laws On regular basis, the Audit Committee reviewed the Company’s compliance with laws regarding securities and exchange, the regulations set up by the SET and the SEC, as well as other laws relating to businesses of the Company and then, agreed that the Company correctly complied with all above. Selection and appointment of external auditors The Audit Committee considered the selection and the appointment of external auditors by taking into account the appropriateness of audit fee compared to the reliability of performance, independence, reputation, scope of work, and the quantity of work for which the external auditors were responsible. Furthermore, a meeting was held for the Audit Committee and the external auditors to attend without the presence of the management. In such meeting, the Audit Committee asked the auditors to give comments on working and coordination with relevant management. For the year 2013, the Audit Committee has deemed it appropriate to propose to the Board of Directors to further propose to the shareholders’ meeting to approve the appointment of Mr. Khitsada Lerdwana, Certified Public Accountant (Thailand) No. 4958 or Mr. Narong Puntawong, Certified Public Accountant (Thailand) No. 3315 or Miss. Thipawan Nananuwat, Certified Public Accountant (Thailand) No.3459 of Ernst & Young Office Limited as the external auditors of the Company and the subsidiary. Having completed the duties and responsibilities assigned by the Board of Directors, the Audit Committee had an opinion that the Company’s financial statements and information disclosure were complete and correct in accordance with the generally accepted accounting standards. Additionally, the policy of good corporate governance was always highly respected; the efficient risk management in line with the risk management measures resulted in efficient internal control system that was adequate and without any significant mistake ; and the related laws and regulations were properly adhered to. As for information disclosure, the Company completely and accurately disclosed the information about related transactions that might lead to conflicts of interest.

On behalf of the Audit Committee

(Prof. Arporn Kengpol) Chairman of the Audit Committee

51

Annual Report 2012


Report of the Board of Directors with Responsibility for the Financial Statement The Board of Directors is responsible for ensuring that the financial statements of Jasmine Telecom Systems Public Company Limited and the consolidated financial statement of the Company’s and its subsidiary are made in accordance with the principles of accounting accepted in general. The accounting policies chosen are suitable and adhered consistently. The information is sufficiently disclosed the notes attached to the financial statements for the benefit of the shareholders and investors. The consolidated financial statement and the Company’s financial statement are made in accordance with principles of accounting generally accepted and are reviewed, audited and given financial opinion by the Audit Committee and trustworthy and independent auditor. The Company’s internal control has been evaluated to ensure the sufficiency and to determine whether any fraud or irregularities occurred by the Audit Committee. The Board of Director is convinced that the consolidated financial statement and the Company’s financial statement for the year 2012 present the Company’s financial situation and operation results in a reliable and accurate manner.

(Mr. Pleumjai Sinarkorn) (Mr. Kriengsak Chalermtiragool) Director Director

Jasmine Telecom Systems Public Company Limited

52


Jasmine Telecom Systems PCL. And Subsidiary

Report And financial

For the year ended 31 December 2012 53

Annual Report 2012


Jasmine Telecom Systems Public Company Limited

54

Separate financial statements Consolidated financial statements 2010 2011 2012 2010 2011 2012 Amount % Amount % Amount % Amount % Amount % Amount %

(Unit : Thousand Baht)

TOTAL NON-CURRENT ASSETS TOTAL ASSETS

1,452,784 26.25 220,649 5.42 176,696 6.53 1,556,213 26.33 258,220 6.02 180,171 6.68 5,533,916 100.00 4,069,297 100.00 2,705,686 100.00 5,911,221 100.00 4,290,790 100.00 2,699,090 100.00

Cash and cash equivalents 758,725 13.71 302,331 7.43 307,694 11.37 768,457 13.00 308,477 7.19 317,294 11.76 Current investments - bank deposits 358 0.01 40,868 1.00 140,152 5.18 1,635 0.03 42,757 1.00 140,303 5.20 Trade and other receivables 2,079,885 37.58 2,495,563 61.33 1,242,271 45.91 2,304,426 38.98 2,675,223 62.35 1,255,903 46.53 Unbilled receivables from related parties 0 - 310 0.01 93 0.00 3,227 0.05 5,326 0.12 114 0.00 Unbilled receivables from unrelated parties 600,681 10.85 616,995 15.16 611,866 22.61 610,856 10.33 623,531 14.53 622,198 23.05 Short-term loans to related party 8,000 0.14 45,105 1.11 69,347 2.56 0 - 0 - 0 - Inventories 249,661 4.51 59,524 1.46 38,789 1.43 265,609 4.49 66,144 1.54 45,408 1.68 Assets held for sale 156,486 2.83 113,183 2.78 88,885 3.29 156,486 2.65 113,183 2.64 88,885 3.29 Prepaid project costs 136,178 2.46 83,489 2.05 566 0.02 140,438 2.38 93,325 2.18 11,076 0.41 other current assets 91,159 1.65 91,278 2.24 29,328 1.08 103,875 1.76 104,603 2.44 37,737 1.40 TOTAL CURRENT ASSETS 4,081,132 73.75 3,848,648 94.58 2,528,990 93.47 4,355,008 73.67 4,032,570 93.98 2,518,919 93.32 NON-CURRENT ASSETS Restricted bank deposits 78,771 1.42 77,926 1.91 60,241 2.23 82,712 1.40 81,505 1.90 64,246 2.38 Long-term trade accounted and receivable from related party 1,134,591 20.50 0 - 0 - 1,134,591 19.19 0 - 0 - Accounts receivable under troubled debt restructuring 126,834 2.29 33,129 0.81 20,301 0.75 305,269 5.16 138,542 3.23 94,456 3.50 Investments in subsidiary 83,899 1.52 83,899 2.06 83,899 3.10 0 - 0 - 0 - Other long-term investments 0 - 10,614 0.26 0 - 0 - 10,921 0.25 0 - Property , plant and equipment 25,458 0.46 11,815 0.29 9,168 0.34 29,466 0.50 23,049 0.54 17,341 0.64 Deposits 3,231 0.06 3,265 0.08 3,087 0.11 4,174 0.07 4,204 0.10 4,128 0.15

ASSETS CURRENT ASSETS

Jasmine Telecom Systems Public Company Limited As at 31 December 2010 to 2012

Statement of Financial Positions


55

Annual Report 2012

S eparate financial statements Consolidated financial statements 2010 2011 2012 2010 2011 2012 Amount % Amount % Amount % Amount % Amount % Amount %

(Unit : Thousand Baht)

- 409,023 3.21 172,439 19.97 1,587,528 9.09 683,000 - 71,006 0.23 0 3.06 340,766 1.11 52,423

6.92 4,827 2.92 237,897 26.86 1,702,708 11.55 345,620 1.20 75,346 - 0 5.76 156,619 0.89 33,490

0.11 5.54 39.68 8.05 1.76 - 3.65 0.78

0 86,765 574,633 392,780 14,484 6,287 82,709 39,649

- 3.21 21.29 14.55 0.54 0.23 3.06 1.47

927,092 16.75 0 - 0 - 927,092 15.68 0 - 0 - 60,862 1.10 0 - 0 - 60,862 1.03 246,224 5.74 231,740 8.59 0 - 13,376 0.33 18,410 0.68 0 - 19,196 0.45 19,134 0.71

0 86,765 540,233 245,956 0 6,287 82,709 29,934

Long-term trade accounts payable - unrelated parties Long-term loans - net of current portion Provision for long-term employee benefits

0.12 5.85 41.07 4.94 1.50 - 3.84 0.58

TOTAL-NON CURRENT LIABILITIES TOTAL LIABILITIES

987,954 17.85 13,376 0.33 18,410 0.68 987,954 16.71 265,420 6.19 250,874 9.29 3,800,757 68.68 2 ,369,484 58.23 1 ,010,294 37.34 4,304,139 72.81 2,821,928 65.77 1,448,181 53.65

TOTAL CURRENT LIABILITIES 2,812,803 50.83 2,356,108 57.90 9 91,884 36.66 3,316,185 56.10 2,556,508 59.58 1,197,307 44.36 NON-CURRENT LIABILITIES

2.16 4,827 3.12 237,897 27.79 1,671,372 9.67 201,065 1.28 60,862 - 0 6.14 156,335 0.67 23,749

119,347 172,439 1,538,005 534,878 71,006 0 339,875 37,253

Shrot-Term bank loans Trust receipts Trade and other payables Accrued project cost Current portion of long-term loans Income tax payable Advance received for goods and services Other current liabilities

LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES

Jasmine Telecom Systems Public Company Limited As at 31 December 2010 to 2012

Statement of Financial Positions (continue)


Jasmine Telecom Systems Public Company Limited

56

S eparate financial statements Consolidated financial statements 2010 2011 2012 2010 2011 2012 Amount % Amount % Amount % Amount % Amount % Amount %

(Unit : Thousand Baht)

-

-

-

-

- (898) (0.02) (3,132) (0.07) (7,680) (0.28)

1,733,159 31.32 1,699,813 41.77 1,695,392 62.66 1,607,082 27.19 1,468,862 34.23 1,250,909 46.35 5,533,916 100.00 4,069,297 100.00 2,705,686 100.00 5,911,221 100.00 4,290,790 100.00 2,699,090 100.00

-

TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

Non-controlling interests of the subsidiary

1,733,159 31.32 1,699,813 41.77 1,695,392 62.66 1,607,980 27.20 1,471,994 34.31 1,258,589 46.63

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY

Share capital Registered 726,250 726,250 706,457 726,250 726,250 706,457 Issued and fully paid-up 702,950 12.70 706,457 17.36 706,457 26.11 702,950 11.89 706,457 16.46 706,457 26.17 Share subscription received in advance 80 0.00 0 - 0 - 80 0.00 0 - 0 - Share premium 418,812 7.57 420,269 10.33 420,269 15.53 418,812 7.09 420,269 9.79 420,269 15.57 Retained earnings Appropriated-statutory reserve 61,681 1.11 63,186 1.55 64,910 2.40 61,681 1.04 63,186 1.47 64,910 2.40 Unappropriated 549,637 9.93 509,900 12.53 503,756 18.62 416,300 7.04 273,924 6.38 58,795 2.18 Other components of shareholders’ equity 0 - 0 - 0 - 8,158 0.14 8,158 0.19 8,158 0.30

SHAREHOLDERS’ EQUITY

Jasmine Telecom Systems Public Comp any Limited As at 31 December 2010 to 2012

Statement of Financial Positions (continue)


57

Annual Report 2012

(Unit : Thousand Baht)

(155,366) (4.50)

3,269,019 94.79 179,772 5.21

13,777 0.40

(10,629) (0.31)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

Profit (Loss) for the Year Actuarial gain (loss)

OTHER COMPREHENSIVE INCOME FOR THE YEAR 13,777

0.40

13,777 0.40 0 0.00

Non-controlling interests of the subsidiary 0 - NET PROFIT (LOSS) FOR THE YEAR 13,777 0.40 Basic earinings per share - 0.02 weight average (at par Baht 1)

PROFIT (LOSS) FOR THE YEAR

Corporate income tax expense

- 0.14 2.12 - 0.91 1.94

2.23

34,471

2.95

30,114

30,114 0

34,471 (3,570)

2.23 30,901

2.23 0.00

(103,355) 0

(2.88) 0.00

(2,495) (0.07) (100,860) (2.81) (0.14)

(2.88)

(0.30)

(4.89) (182,905) (14.92)

(0.86) (29,491) (2.41)

(8.90) (60,087) (4.90)

(4.04) (153,414) (12.52)

(69,640) 0

(4.89) (182,631) (14.90)

(4.89) (182,905) (14.92) 0.00 274 0.02

(2,125) (0.15) (4,548) (0.37) (67,515) (4.74) (178,357) (14.55) (0.10) (0.25)

(69,640)

(12,190)

2.65 (103,355) (2.88) (69,640)

2.95 (0.31)

(10,629)

(103,355)

(57,450)

(4.81) (126,638)

5.48 (92,726) (2.59)

(0.90) (29,491) (2.53)

3.13 63,962

(7.92) (41,867) (3.59) (172,440)

2.67 15.64 0.89 1.84

95.14 1,319,069 107.61 4.86 (93,327) 7.61

0 32,747 191,707 0 10,921 22,577

74.68 923,328 75.33 1.88 25,008 2.04 9.30 112,781 9.20

- 24,708 1.74 6.24 99,328 6.98 - 0 - 0.03 8,029 0.56 17,792 0.50 0 -

- 223,580 0 1,149

86.23 1,062,737 0.81 26,758 3.98 132,295

88.95 1,060,871 90.93 3,505,103 97.78 1,353,857 11.05 105,829 9.07 79,713 2.22 69,189

1.78 0 2.04 1,658 - 24,681 0.52 0 - 10,614 - 22,577

74.69 885,681 75.91 3,091,157 1.53 20,801 1.78 28,874 8.39 94,857 8.13 142,550

0 - 0 - 30,114 2.23 34,471 2.95 0.04 0.05

30,114

(12,190)

42,304

(107,198)

1,203,418 149,502

24,136 27,583 0 6,989 0 0

- 2.89 - 0.04 - 0.52

PROFIT (LOSS) BEFORE INCOME TAX (EXPENES) 24,406 0.71

Finance Cost

TOTAL EXPENSES PROFIT (LOSS) BEFORE FINANCE COST AND INCOME TAX

1,010,448 20,754 113,508

1,352,920 100.00 1,166,700 100.00 3,584,816 100.00 1,423,045 100.00 1,225,742 100.00

1,249,980 92.39 1,116,478 95.70 3,456,084 96.41 1,319,694 92.74 1,179,134 96.20 - - 12,258 1.05 - - - - 12,87 1.05 102,940 7.61 37,964 3.25 128,732 3.59 103,351 7.26 33,729 2.75

86.95 0.69 3.70

3,448,791 100.00

3,320,406 96.28 - - 128,384 3.72

EXPENSES Cost of sales and services 2,998,777 Selling and Servicing expenses 23,805 Administrative expenses 127,517 Other expenses Losses on debt restructiong - Potential losses on debt restructuring 99,752 Doubtful Debt 0 Exchange losses 1,376 Loss on impairment of investment 0 Loss on impairement of asset 17,792

TOTAL REVENUES

Sales and service income Exchange gains Other income

PROFIT OR LOSS : REVENUES

Separate financial statements Consolidated financial statements 2010 2011 2012 2010 2011 2012 Amount % Amount % Amount % Amount % Amount % Amount %

Jasmine Telecom Systems Public Comp any Limited For the Year Ended 31 December 2010 to 2012

Statement of Comprehensive Income


Independent Auditor’s Report To the Shareholders of Jasmine Telecom Systems Public Company Limited I have audited the accompanying consolidated financial statements of Jasmine Telecom Systems Public Company Limited and its subsidiary, which comprise the consolidated statement of financial position as at 31 December 2012, and the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Jasmine Telecom Systems Public Company Limited for the same period.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit opinion.

Basis for Qualified Opinion As described in Note 24 to the financial statements, the Company has disclosed its financial information by business segment in accordance with Thai Accounting Standard No. 14 “Segment Reporting”, except for its operating results, which the Company is unable to disclose by business segment for the reasons described in that note.

Jasmine Telecom Systems Public Company Limited

58


Qualified Opinion

In my opinion, except for non-disclosure of information relating to the operating results by business segment in the financial statements for the year 2012 as described in the preceding paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of Jasmine Telecom Systems Public Company Limited and its subsidiary and of Jasmine Telecom Systems Public Company Limited as at 31 December 2012, their financial performance, and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

Emphasis of Matters I draw attention to the matters as described in Note 8 to the financial statements, the balance of Baht 192 million receivable from an unrelated company which is being disputed, and as described in Note 11 to the financial statements, regarding the balance approximately Baht 94 million (the Company only: Baht 20 million) receivable from this unrelated company under troubled debt restructuring agreement, and as described in Note 27.2 to the financial statements, the submission by this unrelated company of a dispute proposal to the Thai Arbitration Institute asking the subsidiary to pay the money totaling Baht 1,780 million. My opinion is not qualified in respect of the above matters.

Other Matter The consolidated financial statements of Jasmine Telecom Systems Public Company Limited and its subsidiary, and the separate financial statements of Jasmine Telecom Systems Public Company Limited for the year ended 31 December 2011 were audited in accordance with Thai Standards on Auditing by another auditor of our firm who expressed a qualified opinion on those statements and drew attention to the matters similar to the matters as stated in the above emphasis of matters paragraph and the adoption a number of revised and new accounting standards during 2011, under his report dated 27 February 2012.

Khitsada Lerdwana Certified Public Accountant (Thailand) No. 4958 Ernst & Young Office Limited Bangkok: 21 February 2013

59

Annual Report 2012


Statement of financial position

Jasmine Telecom Systems Public Company Limited and its subsidiary As at 31 December 2012

(Unit: Baht) Consolidated financial Separate financial statements statements Note 2012 2011 2012 2011

Assets Current assets Cash and cash equivalents 6 317,294,341 308,477,333 307,694,366 302,331,391 Current investments - bank deposits 140,303,246 42,756,827 140,151,512 40,868,414 Trade and other receivables 8 1,255,903,056 2,675,223,131 1,242,271,006 2,495,563,203 Unbilled receivables Related parties 7 113,797 5,326,330 92,784 310,395 Unrelated parties 622,197,883 623,531,245 611,865,565 616,995,339 Short-term loans to related party 7 - - 69,347,000 45,105,000 Inventories 9 45,408,365 66,143,816 38,788,722 59,524,174 Assets held for sale 10 88,885,126 113,182,972 88,885,126 113,182,972 Prepaid project costs 11,076,090 93,325,414 566,205 83,489,176 Other current assets 37,736,647 104,602,913 29,327,576 91,278,052 Total current assets 2,518,918,551 4,032,569,981 2,528,989,862 3,848,648,116 Non-current assets Restricted bank deposits 64,246,139 81,504,859 60,241,164 77,925,611 Account receivable under troubled debt restructuring 11 94,456,157 138,541,960 20,300,624 33,129,107 Investment in subsidiary 12 - - 83,899,210 83,899,210 Other long-term investment - 10,920,717 - 10,614,463 Property, plant and equipment 13 17,340,835 23,048,718 9,167,865 11,815,362 Deposits 4,127,864 4,203,751 3,086,986 3,265,091 Total non-current assets 180,170,995 258,220,005 176,695,849 220,648,844 Total assets 2,699,089,546 4,290,789,986 2,705,685,711 4,069,296,960 The accompanying notes are an integral part of the financial statements.

Jasmine Telecom Systems Public Company Limited

60


Statement of financial position (continued)

Jasmine Telecom Systems Public Company Limited and its subsidiary As at 31 December 2012

(Unit: Baht) Consolidated financial Separate financial (Unit: Baht) statements Note 2012 2011

2012

statements 2011

Liabilities and shareholders’ equity Current liabilities Short-term bank loans 14 - 4,827,295 - 4,827,295 Trust receipts 15 86,765,306 237,897,352 86,765,306 237,897,352 Trade and other payables 16 574,632,828 1,702,707,991 540,233,214 1,671,372,473 Accrued project cost 392,779,550 345,619,810 245,956,020 201,064,603 Current portion of long-term loans 17 14,484,000 75,345,922 - 60,861,921 Income tax payable 6,286,799 - 6,286,799 Advances received for goods and services 82,709,167 156,619,152 82,709,167 156,335,319 Other current liabilities 39,649,195 33,490,397 29,933,660 23,748,774 Total current liabilities 1,197,306,845 2,556,507,919 991,884,166 2,356,107,737 Non-current liabilities Long-term loans - net of current portion 17 231,740,205 246,224,205 - Provision for long-term employee benefits 18 19,133,733 19,195,639 8,409,592 13,376,307 Total non-current liabilities 250,873,938 265,419,844 18,409,592 13,376,307 Total liabilities 1,448,180,783 2,821,927,763 1,010,293,758 2,369,484,044 The accompanying notes are an integral part of the financial statements.

61

Annual Report 2012


Statement of financial position (continued)

Jasmine Telecom Systems Public Company Limited and its subsidiary As at 31 December 2012

(Unit: Baht) Consolidated financial Separate financial statements statements Note 2012 2011 2012 2011

Shareholders’ equity Share capital Registered 706,457,300 ordinary shares of Baht 1 each (2011 : 726,250,000 ordinary shares of Baht 1 each) 19 706,457,300 726,250,000 706,457,300 726,250,000 Issued and fully paid-up 706,457,300 ordinary shares of Baht 1 each 706,457,300 706,457,300 706,457,300 706,457,300 Share premium 420,269,078 420,269,078 420,269,078 420,269,078 Retained earnings Appropriated-statutory reserve 20 64,909,800 63,186,259 64,909,800 63,186,259 Unappropriated 58,795,387 273,924,146 503,755,775 509,900,279 Other components of shareholders’ equity 2.2 8,157,637 8,157,637 - Equity attributable to owners of the Company 1,258,589,202 1,471,994,420 1,695,391,953 1,699,812,916 Non-controlling interests of the subsidiary (7,680,439) (3,132,197) - Total shareholders’ equity 1,250,908,763 1,468,862,223 1,695,391,953 1,699,812,916 Total liabilities and shareholders’ equity 2,699,089,546 4,290,789,986 2,705,685,711 4,069,296,960 The accompanying notes are an integral part of the financial statements.

Jasmine Telecom Systems Public Company Limited

62


Statement of comprehensive income

Jasmine Telecom Systems Public Company Limited and its subsidiary For the year ended 31 December 2012

(Unit: Baht) Consolidated financial Separate financial statements statements Note 2012 2011 2012 2011

Profit or loss : Revenues Sales and service income 1,179,133,994 1,319,693,937 1,116,477,810 1,249,980,493 Exchange gains 12,879,142 - 12,257,720 Other income 33,729,083 103,351,251 37,964,386 102,939,709 Total revenues 1,225,742,219 1,423,045,188 1,166,699,916 1,352,920,202 Expenses Cost of sales and services 923,328,056 1,062,737,351 885,681,353 1,010,447,724 Selling and servicing expenses 25,008,447 26,758,302 20,801,490 20,753,593 Administrative expenses 112,781,103 132,295,056 94,857,097 113,508,216 Other expenses Losses on debt restructuring 11 - 24,708,434 - 24,136,321 Potential losses on debt restructuring 11 32,747,271 99,328,427 1,657,772 27,583,427 Doubtful debt 8 191,706,806 - 24,681,483 Exchange losses - 8,029,071 - 6,988,608 Loss on impairment of investment 11 10,920,717 - 10,614,463 Loss on impairment of asset 10 22,577,000 - 22,577,000 Total expenses 1,319,069,400 1,353,856,641 1,060,870,658 1,203,417,889 Profit (loss) before finance cost and income tax expenses (93,327,181) 69,188,547 105,829,258 149,502,313 Finance cost (60,086,572) (126,638,154) (41,867,181) (107,198,039) Profit (loss) before income tax expenses (153,413,753) (57,449,607) 63,962,077 42,304,274 Income tax expenses 22 (29,491,258) (12,190,118) (29,491,258) (12,190,118) Profit (loss) for the year (182,905,011) (69,639,725) 34,470,819 30,114,156 Other comprehensive income for the year Actuarial gain (loss) 18 273,726 - (3,569,607) Total comprehensive income for the year (182,631,285) (69,639,725) 30,901,212 30,114,156

The accompanying notes are an integral part of the financial statements.

63

Annual Report 2012


Statement of comprehensive income (continued)

Jasmine Telecom Systems Public Company Limited and its subsidiary For the year ended 31 December 2012

(Unit: Baht) Consolidated financial Separate financial statements statements Note 2012 2011 2012 2011

Profit (loss) attributable to :

Equity holders of the Company (178,356,769) (67,514,967) 34,470,819 30,114,156 Non-controlling interests of the subsidiary (4,548,242) (2,124,758) (182,905,011) (69,639,725) Total comprehensive income attributable to : Equity holders of the Company (178,083,043) (67,514,967) 30,901,212 30,114,156 Non-controlling interests of the subsidiary (4,548,242) (2,124,758) (182,631,285) (69,639,725) Earnings per share 23 Basic earnings per share Profit (loss) attributable to equity holders of the Company (0.25) (0.10) 0.05 0.04 Weighted average number of ordinary shares (shares) 706,457,300 705,448,972 706,457,300 705,448,972 The accompanying notes are an integral part of the financial statements.

Jasmine Telecom Systems Public Company Limited

64


65

Annual Report 2012

Jasmine Telecom Systems Public Company Limited and its subsidiary For the year ended 31 December 2012

Increase in ordinary shares 3,507,300 (80,000) 1,457,300 - - - - 4,884,600 - 4,884,600 Dividend paid 26 - - - - (56,238,479) - - (56,238,479) - (56,238,479) Total comprehensive income for the year - - - - (67,514,967) - - (67,514,967) (2,124,758) (69,639,725) Transferred to statutory reserve 20 - - - 1,505,708 (1,505,708) - - - - Balance as at 31 December 2011 706,457,300 - 420,269,078 63,186,259 273,924,146 8,157,637 8,157,637 1,471,994,420 (3,132,197) 1,468,862,223 Balance as at 1 January 2012 706,457,300 - 420,269,078 63,186,259 273,924,146 8,157,637 8,157,637 1,471,994,420 (3,132,197) 1,468,862,223 Dividend paid 26 - - - - (35,322,175) - - (35,322,175) - (35,322,175) Total comprehensive income for the year - - - - (178,083,043) - - (178,083,043) (4,548,242) (182,631,285) Transferred to statutory reserve 20 - - - 1,723,541 (1,723,541) - - - - Balance as at 31 December 2012 706,457,300 - 420,269,078 64,909,800 58,795,387 8,157,637 8,157,637 1,258,589,202 (7,680,439) 1,250,908,763 The accompanying notes are an integral part of the financial statements.

Balance as at 1 January 2011 702,950,000 80,000 418,811,778 61,680,551 399,183,300 815,7637 8,157,637 1,590,863,266 (1,007,439) 1,589,855,827

(Unit : Baht) Consolidated financial statements Equity attributable to owners of the Company Other component of equity Difference between the purchase price Total Equity of investment Total other equity attributable Total Issued and Share subscription in subsidiary under Components of attributable to non-controlling share fiully paid-up received Share Retained earnings common control and shareholders’ to the owners of interests of hollders’ Note share capital in advance premium Appropriated Unappropriated its net book value equity the Company the subsidiary equity

Statement of changes in shareholders’ equity


Jasmine Telecom Systems Public Company Limited

66

Total Shareholders’ equity

(Unit: Baht)

The accompanying notes are an integral part of the financial statements.

702,950,000 80,000 418,811,778 61,680,551 537,530,310 1,721,052,639 Increase in ordinary shares 3,507,300 (80,000) 1,457,300 - - 4,884,600 Dividend paid 26 - - - - (56,238,479) (56,238,479) Total comprehensive income for the year - - - - 30,114,156 30,114,156 Transferred to statutory reserve 20 - - - 1,505,708 (1,505,708) Bal ance as at 31 December 2011 706,457,300 - 420,269,078 63,186,259 509,900,279 1,699,812,916 Balance as at 1 January 2012 706,457,300 - 420,269,078 63,186,259 509,900,279 1,699,812,916 Dividend paid 26 - - - - (35,322,175) (35,322,175) Total comprehensive income for the year - - - - 30,901,212 30,901,212 Transferred to statutory reserve 20 - - - 1,723,541 (1,723,541) Balance as at 31 December 2012 706,457,300 - 420,269,078 64,909,800 503,755,775 1,695,391,953

Balance as at 1 January 2011

Separate financial statements Issued and Share fully paid-up subscription Retained earnings Note share capital received in advance Share premium Appropriated Unappropriated

Statement of changes Limited and its subsidiary in shareholders’ equity (Continued) Jasmine Telecom Systems PublicFor Company the year ended 31 December 2012


Cash flow statement

Jasmine Telecom Systems Public Company Limited and its subsidiary For the year ended 31 December 2012

(Unit: Baht) Consolidated financial Separate financial statements statements Note 2012 2011 2012 2011

Cash flows from operating activities

Profit (loss) before tax (153,413,753) (57,449,607) 63,962,077 42,304,274 Adjustments to reconcile profit (loss) before tax to net cash provided by (paid from) operating activities: Depreciation 9,689,367 11,434,825 6,154,388 9,968,554 Record of doubtful debt 191,706,806 - 24,681,483 Losses on debt restructuring - 24,708,434 - 24,136,321 Potential losses on debt restructuring 32,747,271 99,328,427 1,657,772 27,583,427 Loss on impairment of investment 10,920,717 - 10,614,463 Loss on impairment of asset 22,577,000 - 22,577,000 Loss (gain) on sales of equipment (149,254) 37,686 - 59,689 Provision for long-term employee benefits 2,211,820 1,969,940 1,463,678 1,269,631 Unrealised exchange losses (gains) (593,937) 1,717,221 27,485 436,435 Interest income (32,963,422) (101,185,806) (37,395,655) (101,965,392) Interest expenses 57,025,043 124,220,736 38,805,652 105,711,006 Profit from operating activities before changes in operating assets and liabilities 139,757,658 104,781,856 132,548,343 109,503,945 Operating assets (increase) decrease Trade and other receivables 1,253,963,923 919,597,170 1,257,310,369 875,428,604 Unbilled receivables 6,545,895 (14,774,588) 5,347,385 (16,925,022) Short-term loans to related party - - (24,242,000) (37,105,000) Inventories 22,470,816 204,405,699 22,470,818 195,077,940 Prepaid project costs 82,249,324 47,112,240 82,922,971 52,688,735 Other current assets 6,290,223 10,087,366 6,579,261 9,877,804 Accounts receivable under troubled debt restructuring 11,338,532 18,223,315 11,170,711 17,952,589 Other assets 75,887 (29,685) 178,105 (34,025) Operating liabilities increase (decrease) Trade and other payables (1,151,032,576) (939,582,194) (1,154,096,672) (921,393,996) Accrued project costs 47,159,740 (337,379,861) 44,891,417 (333,813,680) Advances received for goods and services (73,909,985) (184,147,033) (73,626,152) (183,539,766) Other current liabilities 7,112,697 (20,112,587) 6,254,785 (13,480,115) Other non-current assets (2,000,000) - - Cash from (used in) operating activities 350,022,134 (191,818,302) 317,709,341 (245,761,987) Cash paid for interest expenses (32,787,816) (44,384,826) (14,563,861) (27,536,775) Corporate income tax refund (Cash paid for corporate income tax) 35,431,048 (22,073,782) 30,224,157 (19,654,520) Net cash from (used in) operating activities 352,665,366 (258,276,910) 333,369,637 (292,953,282) The accompanying notes are an integral part of the financial statements.

67

Annual Report 2012


Cash flow statement (Continued)

Jasmine Telecom Systems Public Company Limited and its subsidiary For the year ended 31 December 2012

(Unit: Baht) Consolidated financial Separate financial statements statements Note 2012 2011 2012 2011

Cash flows from investing activities

Increase in current investments - bank deposits (97,546,419) (41,121,414) (99,283,098) (40,510,775) Decrease in restricted bank deposits 17,258,720 1,207,261 17,684,447 845,577 Interest income 6,913,528 5,293,293 9,256,837 5,668,931 Acquistion of equipment (4,025,640) (10,033,732) (3,521,411) (1,341,268) Proceeds from sales of equipment 178,891 23,075 - Proceed from sales of assets held for sale - 43,317,679 - 43,317,679 Net cash from (used in) investing activities (77,220,920) (1,313,838) (75,863,225) 7,980,144 Cash flows from financing activities Decrease in short-term bank loans (4,827,295) (404,195,848) (4,827,295) (114,519,643) Increase (decrease) in trust receipts (151,132,046) 65,458,387 (151,132,046) 65,458,387 Cash received from long-term loans - 289,676,205 - Repayment of long-term loans (75,345,922) (99,973,575) (60,861,921) (71,005,576) Dividend paid (35,322,175) (56,238,479) (35,322,175) (56,238,479) Proceeds from increase in share capital - 4,884,600 - 4,884,600 Net cash used in financing activities (266,627,438) (200,388,710) (252,143,437) (171,420,711) Net increase (decrease) in cash and cash equivalents 8,817,008 (459,979,458) 5,362,975 (456,393,849) Cash and cash equivalents at beginning of year 308,477,333 768,456,791 302,331,391 758,725,240 Cash and cash equivalents at end of year 317,294,341 308,477,333 307,694,366 302,331,391

Supplemental disclosure on non-cash transaction

Debt settlement transaction under the rehabilitation plan in 2011 as described in Note 11 to the financial statements. The accompanying notes are an integral part of the financial statements.

Jasmine Telecom Systems Public Company Limited

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Notes to consolidatedJasmine Telecom Systems Public Company Limited and its subsidiary financial statements For the year ended 31 December 2012 1. Corporate information Jasmine Telecom Systems Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. Its parent company is Jasmine International Public Company Limited, which was incorporated in Thailand. The Company is principally engaged in the design and installation of telecommunication systems, telecom service business, and other businesses. The registered office of the Company is at 200 Moo 4, 9th Floor, Jasmine International Tower, Chaengwatana Road, Pakkred, Nonthaburi. 2. Basis of preparation 2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of Jasmine Telecom Systems Public Company Limited (“the Company”) and a subsidiary company, Cloud Computing Solutions Company Limited (“the subsidiary”), which was incorporated in Thailand. The subsidiary company is principally engaged in the system and software development and sales of computer products. The Company’s investment in the ordinary shares of the subsidiary represented about 97.87 percent of the subsidiary’s registered share capital. b) Subsidiary is fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiary are prepared using the same significant accounting policies as the Company. d) Material balances and transactions between the Company and its subsidiary company have been eliminated from the consolidated financial statements. e) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiary that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position. The Company purchased investment in the subsidiary company at a price of approximately Baht 8 million lower than the attributable net asset value of the subsidiary company. The Company recorded this difference under the caption of “Other components of shareholders’ equity” in shareholders’ equity in the consolidated statement of financial position.

2.3 The separate financial statements, which present investment in subsidiary under the cost method, have been prepared solely for the benefit of the public.

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3. New accounting standards not yet effective The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards: TAS 12 Income Taxes TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates Financial Reporting Standard: TFRS 8 Operating Segments Accounting Standard Interpretations : SIC 10 Government Assistance - No Specific Relation to Operating Activities SIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets SIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders The Company’s management believes that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied, except for TAS 12 Income Taxes.

TAS 12 Income Taxes

This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the stipulated guidelines. The management of the Company expects the adoption of this accounting standard to have the effect of increasing the Company and its subsidiary’s brought-forward retained earnings of the year 2013 by approximately Baht 34 million (the Company only: approximately Baht 34 million). In addition, the Federation of Accounting Professions has issued Notification No. 30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the use of accounting treatment guidance and accounting standard interpretations as follows. Effective date Accounting Treatment Guidance for Transfers of Financial Assets 1 January 2013 Accounting Standard Interpretation : SIC 29 Service Concession Arrangements: 1 January 2014 Disclosures Financial Reporting Standard Interpretations: TFRIC 4 Determining whether an Arrangement contains a Lease 1 January 2014 TFRIC 12 Service Concession Arrangements 1 January 2014 TFRIC 13 Customer Loyalty Programmes 1 January 2014 At present, the management of the Company and its subsidiary are evaluating the impact on the financial statements in the year these standards are effective and has yet to reach a conclusion. Jasmine Telecom Systems Public Company Limited

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4. Significant accounting policies 4.1 Revenue recognition Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances. Revenue from design and installation of telecommunication systems Revenue from design and installation of telecommunication systems including supply of related equipment is recognised by reference to the stage of completion. Revenue from installment sales The Company recognised revenue from installment sales at the date of sale, exclusive of interest. The sales price is the present value of the consideration, determined by discounting the installments receivable at the imputed rate of interest. The interest element is recognised as income on a time proportion basis, using the imputed interest method. Rendering of maintenance services Maintenance service revenue is recognised when service is rendered. Public telephone rental income Public telephone rental income is recognised based on the rental period and, at the rate stipulated in the rental contract. Interest income Interest income is recognised on an accrual basis based on the effective interest rate. 4.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions. 4.3 Trade accounts receivable Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis of debt aging. 4.4 Inventories Inventories are valued at the lower of cost and net realisable value. Cost is determined on the specific identification method. 4.5 Assets held for sale Assets held for sale are valued at the lower of carrying amount and fair value less costs to sell. The management judges that there will be a completed sales of such assets within one year from the date of classification to the assets held for sale.

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4.6 Investments a) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at cost net of allowance for impairment loss (if any). b) Investment in subsidiary is accounted for in the separated financial statements using the cost method net of allowance for impairment loss (if any). The weighted average method is used for computation the cost of investments. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss.

4.7 Property, plant and equipment / Depreciation Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs, on the straight-line basis over the following estimated useful lives: Buildings - 20 years Public telephones - 5 years Buildings and leasehold improvements - 5 years Furniture, fixtures and office equipment - 3 - 10 years Motor vehicles - 5 years Depreciation is included in profit or loss. No depreciation is provided on land and assets under installation. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised.

4.8 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company and its subsidiary, whether directly or indirectly, or which are under common control with the Company and its subsidiary. They also include associates and individuals which directly or indirectly own a voting interest in the Company and its subsidiary that give them significant influence over the Company and its subsidiary, key management personnel, directors and officers with authority in the planning and direction of the operations of the Company and its subsidiary.

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4.9 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period. Gains and losses on exchange are included in profit or loss.

4.10 Impairment of assets At the end of each reporting period, the Company and its subsidiary perform impairment reviews in respect of the property, plant and equipment and investments whenever events or changes in circumstances indicated that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in profit or loss.

4.11 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred.

Post-employment benefits Defined contribution plans The Company, its subsidiary and their employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiary. The fund’s assets are held in a separate trust fund and the Company and its subsidiary’s contributions are recognised as expenses when incurred. Defined benefit plans The Company and its subsidiary have obligations in respect of the severance payments they must make to employees upon retirement under labor law. The Company and its subsidiary treat these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. Acturial gains and losses arising from post-employment benefits are recognised immediately in other comprehensive income. For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company and its subsidiary elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in 2011.

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4.12 Provisions Provisions are recognised when the Company and its subsidiary has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

4.13 Income tax Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. 4.14 Derivatives Forward exchange contracts Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of exchange ruling at the end of reporting period. Unrecognised gains and losses from the translation are included in profit or loss. Premiums or discounts on forward exchange contracts are amortised on a straight-line basis over the contract periods.

4.15 Debt restructuring Potential losses on debt restructuring and losses on debt restructuring When receivables of the Company and its subsidiary are settled through the transfer of assets and the receipt of shares of the debtor, the excess of the extinguished debt over the fair value of the assets and shares received and expected to be received is recognised as a losses on debt restructuring and potential loss on debt restructuring, respectively, in profit or loss.

5. Significant accounting judgments and estimates The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgments and estimates are as follows:

Allowance for doubtful accounts

In determining an allowance for doubtful accounts, the management needs to make judgement and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition.

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Allowance for impairment on assets held for sale

The Company considers allowance for impairment of assets held for sale when net realisable value is below book value. The management uses judgment to estimate impairment loss, taking into consideration the fair values, the types and the characteristics of the assets.

Property plant and equipment/Depreciation

In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and residual values of the plant and equipment of the Company and its subsidiary and to review estimate useful lives and residual values when there are any changes. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgements regarding forecast of future revenues and expenses relating to the assets subject to the review

Post-employment benefits under defined benefit plans

The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Litigation The subsidiary has contingent liabilities as a result of litigation. The subsidiary’s management has used judgment to assess of the results of the litigation and believes that no loss will result. Therefore no contingent liabilities are recorded as at the end of reporting period.

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6. Cash and cash equivalents

Cash Bank deposits Bills of exchange Total

(Unit: Million Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

1 316 - 317

1 221 86 308

1 307 - 308

216 86 302

7. Related party transactions The following are relationships with companies and individuals that control, or are controlled by, the Company and its subsidiary, whether directly or indirectly, or which are under common control with the Company and its subsidiary.

Name of entities

Nature of relationship

Subsidiary Jasmine Group TT&T Subscriber Services Co., Ltd. Triple T Global Net Co., Ltd.

More than 50% shareholding by the Company Common shareholders and directors Common directors Common directors

During the years, the Company and its subsidiary had significant business transactions with related parties. Such transactions, which are summarized below, arose in the ordinary course of businesses and were concluded on commercial terms and based agreed upon between the Company and its subsidiary and those related parties.

(Unit: Million Baht)

Consolidated Separate financial statements financial statements Transfer PricingPolicy 2012 2011 2012 2011

Transactions with parent company Office rental and service expenses 8 8 8 6 Contract price or at prices normally charged to other customers Transactions with subsidiary (eliminated from the consolidated financial statements) Interest income - - 5 1 The rates referenced to MLR per annum Jasmine Telecom Systems Public Company Limited

76


Transactions with related companies Sales and service income

Consolidated Separate financial statements financial statements 2012 2011 2012 2011

44

89

(Unit: Million Baht) Transfer Pricing Policy

13 61 Contract price or at prices

n ormally charged to other customers or cost plus margin

Interest income 27 94 27 94 The rates referenced to MLR per annum Cost of sales and services 66 2 66 2 Contract price or at prices normally charged to other customers

Other expenses 7 6 5 4 Contract price or at prices normally charged to other customers The balances of the accounts as at 31 December 2012 and 2011 between the Company and its subsidiary and those related companies are as follows:

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

Trade accounts receivable - related parties (Note 8) Related companies Jasmine Group 710,554 1,881,183 697,605 1,874,184 Triple T Global Net Co., Ltd. 1,846 1,846 - Total trade accounts receivable - related parties 712,400 1,883,029 697,605 1,874,184 Other receivables - related parties (Note 8) Subsidiary - - 2,504 213 Related companies TT&T Subscriber Services Co., Ltd. 106 106 106 106 Total other receivables - related parties 106 106 2,610 319 Unbilled receivable from related parties Related companies Jasmine Group 114 5,326 93 310 Total unbilled receivable from related parties 114 5,326 93 310

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Annual Report 2012


(Unit : Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

Short-term loans to related party Subsidiary - Total short-term loan to subsidiary - Trade accounts payable - related parties (Note16) Related companies Jasmine Group 291 TT&T Subscriber Services Co., Ltd. 17,703 Total trade accounts payable - related partie 17,994 Other payables - related parties (Note 16) Parent company 18,202 Related companies Jasmine Group 5,169 Total other payables - related companies 5,169 Total other payables - related parties 23,371 Advance received from related parties Related companies Jasmine Group 3,890 Total advance received from related parties 3,890

- -

69,347 69,347

45,105 45,105

2,280 17,703 19,983

232 17,703 17,935

2,161 17,703 19,864

17,133

66

100

4,224 4,224 21,357

276 276 342

332 332 432

2,281 2,281

3,890 3,890

1,997 1,997

During 2012, movements of short-term loans to the subsidiary was as follows:

(Unit: Million Baht) Separate financial statements Balance as at During the year Balance as at 31 December 2011 Increase 31 December 2012

Short-term loans to subsidiary

Jasmine Telecom Systems Public Company Limited

45

78

24

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Directors and management’s benefits During the years ended 31 December 2012 and 2011, the Company and its subsidiary had employee benefit expenses payable to their directors and management as below.

Consolidated financial statements 2012 2011

(Unit: Million Baht) Separate financial statements 2012 2011

Short-term employee benefits 17 22 14 12 Post-employment benefits 8 2 1 1 Total 25 24 15 13

Guarantee obligations with the subsidiary

The Company has outstanding guarantee obligations with its subsidiary, as described in Note 27.4 to the financial statements. 8. Trade and other receivables

Trade receivables - related parties (Note 7) Trade receivables - unrelated parties Other receivables - related parties (Note 7) Other receivables - unrelated parties Total Less: Allowance for doubtful debts Trade and other receivables - net

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

712,400 1,883,029 697,605 1,874,184 599,382 778,498 431,092 607,540 106 106 2,610 319 135,722 13,590 135,645 13,520 1,447,610 2,675,223 1,266,952 2,495,563 (191,707) - (24,681) 1,255,903 2,675,223 1,242,271 2,495,563

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Annual Report 2012


The outstanding balances of trade accounts receivable as at 31 December 2012 and 2011, aged on the basis of due dates, are summarised below.

Trade receivables - related parties Aged on the basis of due dates Not yet due Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total trade receivables - related parties (Note 7) Trade receivables - unrelated parties Aged on the basis of due dates Not yet due Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total Less: Allowance for doubtful debts Total trade receivable - unrelated parties, net Total trade receivable - net Other receivables - unrelated parties Retention receivable as per contract Accrued interest income Others Total Less: Allowance for doubtful debts Total other receivables - unrelated parties, net

Jasmine Telecom Systems Public Company Limited

80

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

5,971 1,193,691

3,621

1,190,972

6,535 7,495 10,632 37,702 9,338 1,549 679,924 642,592 712,400 1,883,029

2,576 3,992 9,338 678,078 697,605

3,215 37,702 1,549 640,746 1,874,184

277,229

276,959

491,808

495,480

48,935 91,403 47,945 91,404 11,293 1,512 11,293 1,512 73,277 - 73,276 188,648 190,103 21,619 22,816 599,382 778,498 431,092 607,540 (179,394) - (12,368) 419,988 778,498 418,724 607,540 1,132,388 2,661,527 1,116,329 2,481,724 122,379 - 12,313 12,313 1,030 1,277 135,722 13,590 (12,313) - 123,409 13,590

122,379 12,313 953 135,645 (12,313) 123,332

12,313 1,207 13,520 13,520


Included in trade receivables from unrelated parties as at 31 December 2012 and 2011, were amounts receivable from the companies majority-owned by the government as follows:

Age of Receivables

Not yet due Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

181,617

432,209

181,347 428,538

36,570 26,277 35,580 26,277 - 1,512 - 1,512 68,681 - 68,681 8,966 8,966 8,966 8,966 295,834 468,964 294,574 465,293

The Company has assigned its rights to receive payments from certain accounts receivable to banks, to secure credit facilities obtained from those banks.

As at 31 December 2011, the Company and its subsidiary have outstanding balances totaling approximately USD 5 million, as described in Note 27.2 to the financial statements, and Baht 25 million (equivalent to totaling approximately Baht 192 million) receivable from TT&T (the Company only: Baht 25 million), and these are presented under the caption of “Trade and other receivables� in the statement of financial position because the debts were incurred after the date on which the Court ordered TT&T to enter into the rehabilitation process (7 November 2008). They therefore were not considered for settlement under the rehabilitation plan of TT&T. The management of the Company and its subsidiary believe that they can claim the full amount from TT&T. They therefore do not record allowance for doubtful accounts for these balances in their accounts. However, in 2012, the management of the Company and its subsidiary assessed the ability of TT&T to settle its debt based on consideration of the business plan of TT&T, and concluded that this was uncertain, since TT&T’s creditor committee had passed a resolution rejecting the investment budget, and the rehabilitation planner had been unable to find a new investor. For conservative reasons, the management of the Company and its subsidiary therefore recorded allowance for doubtful accounts totaling Baht 192 million and for the Company only totaling Baht 25 million in profit or loss of the year 2012.

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9. Inventories

(Unit: Thousand Baht) Consolidated financial statements Reduce cost to net Cost Realisable value I nventories-net 2012 2011 2012 2011 2012 2011

Finished goods

47,618 68,354

(2,210) (2,210)

45,408 66,144

(Unit: Thousand Baht) Separate financial statements Reduce cost to net Cost Realisable value Inventories-net 2012 2011 2012 2011 2012 2011

Finished goods

38,789 59,524

-

- 38,789

59,524

10. Assets held for sale (Unit: Thousand Baht) Uninstalled public Telephones

Cost 130,975 Less: Allowance for impairment of assets (17,792) Net book value as at 1 January 2012 113,183 Transfer out (1,721) Recorded allowance for impairment of assets during the year (22,577) Net book value as at 31 December 2012 88,885 At the present, the Company is in the process of proposing to sell its uninstalled public telephones to unrelated companies. As at 31 December 2012, the management of JTS assessed the fair value of these uninstalled public telephones and therefore recorded allowance for impairment of assets of these public telephones in amounting to Baht 23 million in profit or loss in the current year.

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11. Accounts receivable under troubled debt restructuring According to TT&T’s rehabilitation plan, the Company and its subsidiary will receive settlement of both principal and interest receivable in cash and by conversion to ordinary shares in TT&T in accordance with term and condition as stipulated in the plan. In 2011, the Company and its subsidiary categorised in Group 1 and Group 2 creditors received a total of 84 million ordinary shares of TT&T (the Company only: 82 million ordinary shares), par value of Baht 1 each, as a result of the debt-to-equity conversion process of TT&T. The Company and its subsidiary used the fair value of TT&T ordinary share as of 22 June 2011 (the last trading day of TT&T’s securities in the Stock Exchange of Thailand) of Baht 0.13 each as the basis for recording the transaction. The investments in TT&T ordinary shares are classified as other long-term investments because there are certain restrictions regarding the sale of TT&T shares stipulated in TT&T’s rehabilitation plan. During 2012, TT&T’s creditors’ committee passed a resolution rejecting the investment budget discussed in Note 8 to the financial statements. The management of the Company and its subsidiary therefore decided to record allowance for impairment of its investment in the ordinary shares of TT&T it received as part of TT&T’s debt-to-equity conversion process amounting to Baht 11 million (the Company only: Baht 11 million) in profit or loss for the year 2012, and recorded potential losses an debt restructuring for outstanding balance receivable which will be settled by conversion to shares totaling approximately Baht 33 million (the Company only: Baht 2 million) in the profit or loss for the year 2012. As at 31 December 2012, the Company and its subsidiary have an outstanding balance totaling approximately Baht 94 million (2011: Baht 106 million) (the Company only: Baht 20 million (2011: Baht 32 million)) that are receivable from TT&T under troubled debt restructuring agreements, and which is to be settled in cash over 4 years inaccordance under the rehabilitation plan. The balance is being disputed and being considered by the Central Bankruptcy Court. The management of the Company and its subsidiary believes that the claims approved by the Court will not materially differ from the balance of claims recorded in the Company and its subsidiary’s accounts. The Company and its subsidiary filed an appeal against the approval of the business rehabilitation plan to the Supreme Court. At present, the case is being considered by the Supreme Court. 12. Investment in subsidiary The Company has pledged the share certificates of the investment in 288,199 ordinary shares of the subsidiary company, which represents 52.40 percent of total ordinary shares of that company, as a security for long-term debt under rehabilitation plan of the parent company.

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Jasmine Telecom Systems Public Company Limited

84

Buildings

Public Buildings and Furniture, fixtures Motor Assets under Telephone leasehold improvement and office Equipment vehicles installation total

Consolidated Financial Statements

(Unit: Thousand Baht)

Cost 1 January 2011 2,000 1,239 18,055 15,696 70,452 9,981 - 117,423 Additions - - - 451 1,756 - 7,826 10,033 Transfers in (out) - - (10,490) - 7,826 - (7,826) (10,490) Disposals - - - (128) (2,429) (502) - (3,059) 31 December 2011 2,000 1,239 7,565 16,019 77,605 9,479 - 113,907 Additions - - - - 4,026 - - 4,026 Transfers in (out) - - 2 - (17) - - (15) Disposals - - - - (1,599) (1,117) - (2,716) 31 December 2012 2,000 1,239 7,567 16,019 80,015 8,362 - 115,202 Accumulated depreciation 1 January 2011 - 1,132 7,266 11,744 58,516 9,299 - 87,957 Depreciation for the year - 57 2,855 2,322 5,556 645 - 11,435 Transfers - - (5,534) - - - - (5,534) Depreciation on disposals - - - (128) (2,405) (466) - (2,999) 31 December 2011 - 1,189 4,587 13,938 61,667 9,478 - 90,859 Depreciation for the year - 1 1,513 1,642 6,533 - - 9,689 Transfers - - - - (1) - - (1) Depreciation on disposals - - - - (1,570) (1,116) - (2,686) 31 December 2012 - 1,190 6,100 15,580 66,629 8,362 - 97,861 Net book value 2,000 50 2,978 2,081 15,938 1 - 23,048 31 December 2011 31 December 2012 2,000 49 1,467 439 13,386 - - 17,341 Depreciation for the year 2011 (Baht 4 million included in cost of sales and services, and the balance in selling, servicing and administrative expenses) 11,435 2012 (Baht 4 million included in cost of sales and services, and the balance in selling, servicing and administrative expenses 9,690

Land

13. Property, plant and equipment


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Annual Report 2012

Separate finiancial statement Leasehold Furniture, fixtures Motor Asset under improvement and office equipment vechiles installation Total

Cost 1 January 2011 18,055 12,258 47,155 9,320 - 86,788 Additions - - 1,341 - - 1,341 Transfers out (10,490) - - - - (10,490) Disposals - (128) (301) (502) - (931) 31 December 2011 7,565 12,130 48,195 8,818 - 76,708 Additions - - 3,521 - - 3,521 Transfers in (out) 2 - (17) - - (15) Disposals - - - (952) - (952) 31 December 2012 7,567 12,130 51,699 7,866 - 79,262 Accumulated depreciation 1 January 2011 7,266 8,397 37,027 8,639 - 61,329 Depreciation for the year 2,855 2,266 4,202 645 - 9,968 Transfer (5,534) - - - - (5,534) Depreciation on disposals - (126) (278) (466) - (870) 31 December 2011 4,587 10,537 40,951 8,818 - 64,893 Depreciation for the year 1,513 1,488 3,153 - - 6,154 Transfer - - (1) - - (1) Depreciation on disposals - - - (952) - (952) 31 December 2012 6,100 12,025 44,103 7,866 - 70,094 Net book value 31 December 2011 2,978 1,593 7,244 - - 11,815 31 December 2012 1,467 105 7,596 - - 9,168 Depreciation for the year 2011 (Baht 3 million included in cost of sales and services, and the balance in selling, servicing and administrative expenses) 9,968 2012 (Baht 2 million included in cost of sales and services, and the balance in selling, servicing and administrative expenses) 6,154

Public telephone

(Unit : Thousand Baht)


As at 31 December 2012, certain plant and equipment items of the Company and its subsidiary had been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation of those assets amounted to approximately Bah 80 million (2011: Baht 57 million) (The Company only: Baht 56 million (2011: Baht 35 million)). 14. Short-term bank loans The Company’s short-term bank loans carry interest at the rate referenced to MLR per annum and are secured by the assignment of rights to receive payments from certain accounts receivable, as described in Note 8 to the financial statements. 15. Trust receipts The balances are secured by the pledge of bank deposits and the assignment of rights to receive payments from accounts receivable as described in Note 8 to the financial statements. 16. Trade and other payables

Trade payables - related parties (Note 7) Trade payables - unrelated parties Other payables - related parties (Note 7) Other payables - unrelated parties Total trade and other payables

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

17,994 19,983 522,539 1,657,364 23,371 21,357 10,729 4,004 574,633 1,702,708

17,935 19,864 511,864 1,647,732 342 432 10,092 3,345 540,233 1,671,373

17. Long-term loans

Long-term loans Less: Current portion Long-term loans - netof current portion

Jasmine Telecom Systems Public Company Limited

86

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

246,224 321,570 (14,484) (75,346) 231,740 246,224

- - -

60,862 (60,862) -


The subsidiary’s long-term loan carries interest at the rate referenced to MLR per annum and is repayable in 2011 in 3 installments, which are in August, September and December 2011, and in 28 quarterly installments from March 2012 to December 2018. The loan is guaranteed by the Company. The loan agreement contains an additional condition relating to repayment, whereby, if the subsidiary receives settlements from TT&T and/or cash receipts from sales of TT&T shares received under TT&T’s rehabilitation plan, the subsidiary agrees to pay the bank all funds received to settle the loan interest first, with any remaining amount to be used to settle the loan principal. If the amount received is more than the interest and principal of any installment, the subsidiary agrees to use the excess to settle the principal of the next installment due.

In 2012, the Company has fully repaid all outstanding balance of its long-term loan.

18. Provision for long-term employee benefits Provision for long-trem employee benefits, which is compensations on employees’ retirement, was as follows;

Defined benefit obligation at beginning of year Current service cost Interest cost Benefits paid during the year Defined benefit obligation at end of year Unrecognised actuarial (gain) loss Provisions for long-term employee benefits at end of year

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

19,196 1,444 768 (2,000) 19,408 (274) 19,134

17,226 1,440 686 (156) 19,196 - 19,196

13,376 929 535 - 14,840 3,570 18,410

12,107 944 481 (156) 13,376 13,376

Long-term employee benefit expenses included in the profit or loss was as follows:

Current service cost

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

1,444 Interest cost 768 Total expense recognised in profit or loss 2,212 Line items under which such expenses are included in profit or loss Administrative expenses 2,212

1,440 686 2,126

929 535 1,464

944 481 1,425

2,126

1,464

1,425

87

Annual Report 2012


Total actuarial gains recognised in the other comprehensive income of the Company and its subsidiary as at 31 December 2012 amounted to Baht 0.3 million (The Company only: losses of Baht 3.5 million)

Principal actuarial assumptions at the valuation date were as follows:

Consolidated / Separate financial statements 2012 2011 (% per annum) (% per annum)

Discount rate Future salary increase rate

3.75% 5%

4% 5%

Amounts of defined benefit obligation for the current and previous two periods are as follows:

(Unit: Thousand Baht) Experience adjustments arising Defined benefit obligation on the plan liabilities Consolidated Separate Consolidated Separate financial statements financial statements financial statements financial statements

Year 2012 19,134 18,410 (1,360) 2,548 Year 2011 19,196 13,376 - Year 2010 17,226 12,107 - - 19. Registered share capital The Annual General Meeting of shareholders held on 25 April 2012, the Company’s shareholders approved the reduction of its registered share capital from Baht 726,250,000 (726,250,000 ordinary shares at a par value of Baht 1 each) to Baht 706,457,300 (706,457,300 ordinary shares at a par value of Baht 1 each) by canceling 19,792,700 ordinary authorised but unissued shares with a par value of Baht 1 each, a total of Baht 19,792,700, previously reserved to accommodate the exercise of ESOP warrants scheme, following the expiration of the said warrants. The Company registered the reduction of registered share capital with the Ministry of Commerce on 8 May 2012.

20. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.

Jasmine Telecom Systems Public Company Limited

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21. Expenses by nature Significant expenses by nature are as follows:

Subcontracting expenses Salary and wages and other employee benefits Inventories used Depreciation Rental expenses from operating lease agreements Losses on debt restructuring Potential losses on debt restructuring Doubtful debt Loss on impairment of investment Loss on impairment of asset

(Unit : Million Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011

803 93 61 10 8 - 33 192 11 23

948 107 62 11 9 25 99 - - -

803 76 61 6 6 - 2 25 11 23

948 68 47 10 6 24 28 -

22. Corporate income tax The subsidiary is not liable to corporate income tax for the years 2012 and 2011 due to tax loss brought forward. 23. Earnings per share Basic earnings per share is calculated by dividing profit (loss) for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year. 24. Segment information The Company and its subsidiary’s business operations involve three principal segments: (1) Design and installation of telecommunication systems (2) Telecom service business and (3) Other segments. These operations are mainly carried on in Thailand. Below is the consolidated financial information for the years ended 31 December 2012 and 2011 of the Company and its subsidiary by segment.

Design and installation of telecm service Telecommunication business systems segment segment 2555 2554 2555 2554

(Unit: Million Baht) Other segments 2555 2554

Consolidation 2555 2554

Revenue from external customers 1,129 1,235 12 60 38 25 1,179 1,320 Trade accounts receivable 1,132 2,662 - - - - 1,132 2,662 Inventories 36 60 9 6 - - 45 66 Property, plant and equipment - - 1 3 - - 1 3 Unallocated assets 1,521 1,560 Total assets 2,699 4,291 The Company disclosed its financial information by business segment in accordance with Thai Accounting Standard No. 14 “Segment Reporting”, except for the operating results which the Company is unable to disclose by business segment since the management believes that such disclosure would unfavorably affect the management and operation of the businesses of the Company and its subsidiary.

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Annual Report 2012


25. Provident fund The Company, its subsidiary and their employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The Company, its subsidiary and their employees contributed to the fund monthly at the rate of 3 - 8 percent of basic salary. The fund, which is managed by Bangkok Bank Public Company Limited, will be paid to employees upon termination in accordance with the fund rules. During the year 2012, the Company and its subsidiary contributed Baht 5 million, and the Company only contributed Baht 4 million, to the fund (2011: Baht 5 million and Baht 3 million, respectively). 26. Dividends Dividends Approved by

Final dividends for the year 2010 Interim dividends for 2012

Annual General Meeting of the shareholders on 28 April 2011 Board of Directors’ meeting on 7 November 2012

Total Dividends (Million Baht)

Dividends per share (Baht)

56

0.08

35

0.05

27. Commitments and contingent liabilities 27.1 Operating lease commitments The Company and its subsidiary have entered into lease agreements in respect of the lease of office building space and related services. The terms of the agreements are generally between 1 and 3 years and non-cancellable. As at 31 December 2012, future minimum lease payments required under these non-cancellable operating leases contracts were as follows. Consolidated financial statements

(Unit: Million Baht) Separate Payable financial statements

Payable: In up to 1 year 5 3 27.2 Disputes The subsidiary has an outstanding balance receivable from TT&T amounting to approximately USD 5 million (as at 31 December 2012 equivalent to approximately Baht 167 million (2011: Baht 167 million)). This balance is being disputed with TT&T. In 2011, TT&T submitted a dispute proposal to the Thai Arbitration Institute asking the subsidiary to pay a total of Baht 1,780 million, together with interest at the rate of 7.5% per annum from the date of the submission of the dispute until the subsidiary effects whole performance. However, the management of the subsidiary believes that the subsidiary did not breach the agreement and will not have to pay such amount to TT&T. In February 2012, the subsidiary filed an objection against the aforementioned dispute proposal of TT&T with the Thai Arbitration Institute, seeking to revoke the Jasmine Telecom Systems Public Company Limited

90


dispute proposal of TT&T and asking the Thai Arbitration Institute to order TT&T to pay a total of Baht 528 million, together with interest at the rate of 7.5% per annum from the next date after the submission of the objection until TT&T effects whole performance. Subsequently, in July 2012, TT&T filed an answer to the subsidiary’s objection with the Thai Arbitration Institute, asking the Thai Arbitration Institute to reject the subsidiary’s objection that proposed TT&T be ordered to pay a total of Baht 528 million, together with interest. Currently, both parties have already appointed arbitrators and they are waiting for the arbitrators to contact them about scheduling. 27.3 Litigation The subsidiary has been sued for approximately Baht 9 million in respect of a breach of a purchase and sale contract. The case is under consideration by the court. However, the Company and its subsidiary’s management believe the subsidiary will not suffer any losses as a result of this case.

27.4 Guarantees (a) The Company had obligations in respect of its guarantee of the long-term loan facilities with a local bank of its subsidiary totaling Baht 290 million, as described in Note 17 to the financial statements. (b) As at 31 December 2012, there were outstanding bank guarantees of Baht 846 million (2011: Baht 1,028 million) issued by banks on behalf of the Company and its subsidiary, with Baht 808 million (2011: Baht 978 million) attributed to the Company, in respect of certain bid bonds and warranty bonds as required in the normal course of business of the Company and its subsidiary.

28. Financial instruments 28.1 Financial risk management Financial instruments of the Company and its subsidiary, as defined under Thai Accounting Standard No. 107 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade and other receivables, loan providing, investments, short-term loans, trade and other payables, and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Company and its subsidiary are exposed to credit risk primarily with respect to trade and other receivables and loans. The Company and its subsidiary manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. However, since the majority of sales and services are supplied to credit worthy customers such as the companies of which the major shareholder is government. The maximum exposure to credit risk is limited to the carrying amounts of trade account receivable, other accounts receivable and loans as stated in the statement of financial position. Interest rate risk The Company and its subsidiary’s exposure to interest rate risk relates primarily to its deposits with financial institutions, short-term loans and long-term loans. Most of the Company and its subsidiary’s financial assets and liabilities of the Company and its subsidiary bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.

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Annual Report 2012


Foreign currency risk The Company and its subsidiary’s exposure to foreign currency risk arise mainly from trading and services transactions that are denominated in foreign currencies. The Company and its subsidiary seek to reduce this risk by entering into forward exchange contracts when they considers appropriate. Generally, the forward contracts mature within one year. The balances of financial assets and liabilities of the Company and its subsidiary denominated in foreign currencies are summarised below. Foreign currency

US dollar Euro

Consolidated finance statements Financial assets Financial liabilities Average exchange rate as at 31 December as at 31 December as at 31 December 2012 2011 2012 2011 2012 2011 (Million) (Million) (Million) (Million) (Baht per 1 foreign currency unit)

0.4 31.8 1.0 33.2 30.63 31.64 - - 0.1 - 40.56 -

Foreign currency

US dollar Euro

Separate finance statements Financial assets Financial liabilities Average exchange rate as at 31 December as at 31 December as at 31 December 2012 2011 2012 2011 2012 2011 (Million) (Million) (Million) (Million) (Baht per 1 foreign currency unit)

0.1 31.5 0.2 32.4 30.63 31.64 - - 0.1 - 40.56 -

The Company’s foreign exchange contracts outstanding are summarised below.

Foreign currency Bought amount (Million)

Euro

0.1

Foreign currency Bought amount (Million)

US dollar Euro

As at 31 December 2012 Contractual exchan ge rate Bought Contractual maturity date (Baht Per 1 foreign currency unit)

45.36

14 January 2013

As at 31 December 2011 Contractual exchange rate Bought Contractual maturity dat (Baht Per 1 foreign currency unit)

0.7 0.3

Jasmine Telecom Systems Public Company Limited

31.54 44.81

92

29 June 2012 27 June 2012


28.2 Fair values of financial instruments Since the majority of financial instruments of the Company and its subsidiary are short-term in nature, loans providing and loans borrowing carry interest at rates close to market rates, their fair value is not expected to be materially different from the amounts presented in the statements of financial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

29. Capital management The primary objective of the Company’s capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern.

As at 31 December 2012, the Group’s debt to equity ratio was 1.16:1 (2011: 1.92:1) and the Company was 0.60:1 (2011: 1.39:1).

30. Event after the reporting period On 21 February 2013, the Company’s Board of Directors meeting No. 1/2556 approved for payment of a final dividend of Baht 0.10 per share from 2012 retained earnings. However, during 2012 the Company had already paid an interim dividend of Baht 0.05 per share to its shareholders. Hence, the balance of the dividend to be paid to the shareholders amounted to Baht 0.05 per share, or a total of approximately Baht 35 million. However, this resolution will be further proposed for the shareholders’ approval in the Ordinary General Meeting of Shareholders for fiscal year 2013. 31. Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 21 February 2013.

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Annual Report 2012


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Jasmine Telecom Systems Public Company Limited

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THE WAY FOR BETTER COMMUNICATION LIFE ปกหลัBETTER งอยู่ในไฟล์ link ชื่อ cover NEW 09

Jasmine Telecom Systems Public Company Limited

200 Moo 4, 9th Floor Jasmine International Tower, Chaengwatana Road, Tambon Pakkret, Amphoe Pakkret, Nonthaburi, 11120, Thailand Tel:+66 (0) 2 100 8300 Fax:+66 (0) 2 502 3363 http://www.jts.co.th

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Annual Report 2012

Jts 12  

JTS_2012 JASMINE TELECOM SYSTEMS PCL Annual Report 2012

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